Question: Sammy Inc manufactures motor scooters For each of the following

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

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  • CreatedJanuary 16, 2015
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