Questions 24-25

Zagart's Zambonis manufactures Zambonis (ice rink machines). Its cost of quality data appears below. Total manufacturing cost this year was $4.6 million.

	$ thou
Engineering tests at supplier's factory	18
Field testing new product	12
Inspection costs	42
Process re-engineering	50
Product redesign	42
Rework	45
Sales returns (at cost)	105
Scrap	22
Training employees on new system	6
Warranty repairs	60
Waste	14
Total	416

25.)In evaluating Zagart's Zambonis cost of quality report, which is false?

(a)ZZ is likely not spending enough on training relative to other costs of quality

(b)The external failure costs are likely understated

(c)ZZ is not spending enough on appraisal relative to internal and external failure costs

(d)ZZ is likely to have achieved its optimum quality level

(e)None of the above