Item 1

Fabrick Company's quality cost report is to be based on the following data:

Lost sales due to poor quality	$ 78,000
Quality data gathering, analysis, and reporting	$ 23,000
Net cost of spoilage	$ 88,000
Re-entering data because of keying errors	$ 98,000
Test and inspection of in-process goods	$ 24,000
Final product testing and inspection	$ 78,000
Statistical process control activities	$ 49,000
Returns arising from quality problems	$ 16,000
Downtime caused by quality problems	$ 26,000

What would be the total external failure cost appearing on the quality cost report?

$94,000

$480,000

$104,000

$306,000