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    Cost Classifications for The Door Company

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    The Door Company manufactures doors. Classify each of the following quality costs as prevention costs, appraisal costs, internal failure costs, or external failure costs

    a. Retesting of reworked products

    b. Downtime due to quality problems

    c. Analysis of the cause of defects in production

    d. Depreciation of test equipment

    e. Warranty repairs

    f. Lost sales arising from a reputation for poor quality

    g. Quality circles

    h. Rework direct manufacturing labor and overhead

    i. Net cost of spoilage

    j. Technical support provided to suppliers

    k. Audits of the effectiveness of the quality system

    l. Plant utilities in the inspection area

    m. Reentering data because of keypunch errors.

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    Solution Preview

    Please see attached file for answers.

    Prevention costs are those costs associated with actions to ensure that defects do not occur in initial production.

    Appraisal costs, on the other hand, are cost incurred to test and inspect products in order to identify those products that do not meet specifications.

    Internal and external failure costs are ...

    Solution Summary

    The solution determines the cost classifications for The Door Company, a manufacturer of doors.

    $2.19