Sammy, Inc. manufactures motor scooters. For each of the following examples of quality costs, indicate which of the following quality cost categories each example represents: prevention costs, appraisal costs, internal failure costs, or external ­failure costs.

1. Preventive maintenance on machinery
2. Direct materials, direct labor, and manufacturing overhead incurred to rework a defective scooter that is detected in-house through inspection
3. Lost profits from lost sales if the company’s reputation is hurt because customers previously purchased a poor- quality scooter
4. Cost of inspecting raw materials, such as chassis and wheels
5. Working with suppliers to achieve on-time delivery of defect- free raw materials
6. Cost of warranty repairs on a scooter that malfunctions at a customer’s location
7. Costs of testing durability of vinyl
8. Cost to re- inspect reworked scooters

  • CreatedJanuary 16, 2015
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