Question

In: Accounting

Following is a list of quality-related activities: Mark each activity according to whether it pertains to...

Following is a list of quality-related activities:

Mark each activity according to whether it pertains to the internal costs of prevention, appraisal, production, or postsales costs.

(Select all that may apply.)

1. Inspection of units when they are 100% complete to remove defective units

prevention

appraisal

production

post sales

2. Design of a process with as few parts as possible to reduce the chance of defects

prevention

appraisal

production

post sales

3. Warranty costs for defective products returned to the factory for rework

Prevention

appraisal

production

post sales

4. Reworking of spoiled units before they leave the factory

prevention

appraisal

production

post sales

5. Costs to defend the company against lawsuits for damages caused by defective products

prevention

appraisal

production

post sales

6. Tracking number of defects for each manufacturing team and posting of daily defect rates on a plant-wide bulletin board

prevention

appraisal

production

post sales

7. Redesign of a manufacturing process to reduce the rate of defects

prevention

appraisal

production

post sales

Solutions

Expert Solution

1. Appraisal cost

Inspection of units when they are 100 % complete is part of appraisal costs. Inspection involves checking units produced to see if they comply with the quality specifications and if quality norms are not met they are segregated. So inspection is part of appraisal cost.

2. Prevention cost

Design of a new process will reduce the chances of defects in the future. Hence it is a prevention cost. A change is design is needed when there are high defects and a company might incur prevention cost to change the design of the new process

3. Post sales cost

Warranty costs are incurred for sales made to customers and the products not meeting the required standard in the market. When the product is covered under warranty the additional cost incurred is part of post sales cost

4. Production cost

Rework on spoiled units is part of the internal failure cost. The product manufactured is not meeting the quality specification and there is lot of spoilage in the production process. So this cost is part of production cost

5. Post sales cost

The cost to defend the company against lawsuits for damaged caused by defective products is part of the post sales cost. The lawsuit is defended against the external parties who have filed case in court for product not meeting the required specifications

6. Appraisal cost

The daily tracking of the defects for each manufacturing process and team and posting of the daily defect rates on a plant-wide bulletin board is part of the appraisal cost. The quality is continuously monitored in order to attain the required standards and hence it is appraisal cost

7. Prevention cost

The redesign of manufacturing process is done to ensure there are not future defects arising in the products and hence it is part of the prevention cost.

ekkarill92 answered 1 year ago
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