Exercise 12-2 (Static) Classification of Quality Costs (L012-2) A number of activities that are part of a company's quality control system are listed below: Required: 1. Classify the costs associated with each of these activities into one of the following categories: prevention cost, appraisal cost, Internal failure cost, or external failure cost. Prevention Appraisal Cost Cost Internal Failure Cost External Failure Cost Activities a. Product testing b. Product recalls c. Rework labor and overhead Quality circles Downtime caused by defects Cost of field servicing 9. Inspection of goods h Quality engineering Warranty repairs Statistical process control * Net cost of scrap Depreciation of test equipment m. Returns and allowances arising from poor quality n. Disposal of production defects o. Technical support to suppliers p. Systems development 9. Warranty replacements Field testing at customer site www p. Systems development 9. Warranty replacements Field testing at customer site s. Quality training 2-a. Which type of costs are incurred in an effort to keep poor quality of conformance from occurring? External failure costs es Prevention costs and appraisal costs Internal failure costs 2-b. Which type of costs are incurred because poor quality of conformance has occurred? Appraisal costs Prevention costs Internal and external failure costs