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The following are the expected quality costs of Best Bike Ltd, a major bicycle manufacturer: Quality inspections during processing $10,800 Cost of quality training programs
The following are the expected quality costs of Best Bike Ltd, a major bicycle manufacturer:
Quality inspections during processing | $10,800 |
---|---|
Cost of quality training programs | $25,700 |
Cost of replacement bikes provided under warranty | $13,500 |
Laboratory testing of bikes and components | $16,800 |
Cost of rewelding faulty joints discovered during processing | $13,400 |
Sales commissions on faulty bikes returned by customers | $7,600 |
Operating an X-ray machine to detect faulty welds | $23,500 |
Rework on defective wheels | $18,900 |
Lost contribution on time to correct production line quality problems | $22,300 |
Contribution margin forgone on lost future bike sales | $11,900 |
Calculate the total external failure costs.
a) $51,100
b) $25,400
c) $33,000
d) $21,100
e) $54,600
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