Galati Company’s quality cost report is to be based on the following data: Lost sales due to poor quality $22,000 Test and inspection of incoming materials $91,000 Rework labour and overhead $55,000 Test and inspection of in-process goods $29,000 Product recalls $46,000 Quality data gathering, analysis, and reporting $10,000 Disposal of defective products $83,000 Maintenance of test equipment $57,000 Quality engineering $97,000
Required:
Prepare a quality cost report in good form with separate sections for prevention costs, appraisal costs, internal failure costs, and external failure costs. to try to keep each category straight think in terms of where the materials and products are in the production or sales cycle when these expenses are incurred.
