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Schedule of Activity Costs Quality Control Activities Activity Cost Process audits $50,000 Training of machine operators 28,000 Processing returned products 19,000 Scrap processing (disposal) 25,000 Rework 8,000 Preventative maintenance 30,000 Product design 46,000 Warranty work 12,000 Finished goods inspection 23,000 From the above schedule of activity costs, determine the external failure costs
Schedule of Activity Costs
Quality Control Activities Activity Cost Process audits $50,000 Training of machine operators 28,000 Processing returned products 19,000 Scrap processing (disposal) 25,000 Rework 8,000 Preventative maintenance 30,000 Product design 46,000 Warranty work 12,000 Finished goods inspection 23,000
From the above schedule of activity costs, determine the external failure costs.
10 $39,000 0 $19,000 0 $12,000 0 $31,000
Expert Solution
Computation of External Failure Costs:
Processing returned product = $19,000
Warranty = $12,000
Total External Failure Costs = $31,000
So, the correct option is 4th "$31,000".
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