Question
Dilan & Co. makes computer parts. Des Dilan, the president who was worried about the declining sales, recently asked the management accountant to develop a
Dilan & Co. makes computer parts. Des Dilan, the president who was worried about the declining sales, recently asked the management accountant to develop a total quality control program. Management accountant started listing down various costs of quality that Dilan &Co. incurs. The first 6 items listed by management accountant were as follows: Cost of reworking defective parts after the discovery of inspectors Lost profit from lost sales due to parts returned by customers Costs incurred by sales representatives to customer sites to repair minor parts defects Training provided to Junior technicians Cost incurred by the purchasing officer in inspecting incoming materials Legal cost from customer lawsuits. Classify each item as preventive cost, an appraisal cost, an internal failure cost or an external failure cost and explain the relationship among these costs.
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