calculate net cost (benefit) from implementing quality program

Cost (Benefit) Analysis Costs (Savings) Prevention costs: Negotiating with and training suppliers to obtain higher quality materials and on-time delivery 300,200 Redesigning the speakers to make them easier to manufacture 1,409,000 Appraisal costs: Additional 20 minutes of testing for each speaker Savings on inspection of raw materials 601,000 (409,000) Internal failure costs: Savings on rework Savings on lost profits from lost production due to rework (655,000) (310,000) External failure costs: (201,000) (858,000) 12877200 Savings on warranty repair costs Savings on lost profits from lost sales due to disappointed customers Net cost (benefit) from implementing quality program