1. Describe four quality-related costs that ODeesha might incur and tell how they are related. (10 marks)...
Question:
1. Describe four quality-related costs that O’Deesha might incur and tell how they are related. (10 marks)
2. Based on the four quality-related costs discussed a) above, prepare the quality cost report for the O’Deesha Company, using the information given. (15 marks)
O’Deesha Company has the following information available:
Quality engineering of products.......................$20,000
Quality training of employees.............................$2,000
Net cost of scrap................................................$30,000
Rework labor.......................................................$4,500
Warranty repairs.............................................$100,000
Product recalls...............................................$200,000
Liability arising from defective products ..$1,000,000
Maintenance of test equipment.......................$44,000
Quality improvement projects.........................$55,000
Setups for testing................................................$3,000
Supplies used in testing.....................................$5,500
Downtime caused by defects.........................$70,000
Disposal of defective products.......................$80,000
Consumer Behavior Buying, Having and Being
ISBN: 978-0133450897
11th edition
Authors: Michael R. Solomon