Sales revenue $789,000 $582,000
Costs
Scrap $2,070 $1,780
Process inspection 2,950 1,830
Quality training 23,850 11,790
Product testing equipment 5,250 4,410
Field testing 8,490 6,390
Warranty repairs 3,450 3,150
Rework 19,850 16,740
Preventive maintenance 16,290 8,640
Legal expense for warranty claims 7,890 4,410
Materials inspection 11,370 11,250
Required:
a. Classify these items into Prevention, Appraisal, Internal failure, or External failure costs.
b. Calculate the ratio of the prevention, appraisal, internal failure, and external failure costs to sales for May and June.
Classify these items into Prevention, Appraisal, Internal failure, or External failure costs.
Activity Category
Scrap
Process inspection
Quality training
Product testing equipment
Field testing
Warranty repairs
Rework
Preventive maintenance
Legal expense for warranty claims
Materials inspection