Business Solutions Corporation Business Solutions Corporation is a manufacturer of a versatile statistical calculator.The following information is a summary of defective and returned units for the previous year.
Refer to Business Solutions Corporation.The total quality cost is
A)$15,000.
B)$15,750.
C)$28,500.
D)$11,250.

Question

Business Solutions Corporation Business Solutions Corporation is a manufacturer of a versatile statistical calculator.The following information is a summary of defective and returned units for the previous year.
 Refer to Business Solutions Corporation.The total quality cost is
A)$15,000. 
B)$15,750. 
C)$28,500. 
D)$11,250.

Quizplus · Accepted Answer

To calculate the total quality cost, we need to add the cost of prevention (P), appraisal (A), and internal and external failure (I + E). 
P = 500 units * $10 per unit = $5,000 
A = 1,000 units * $2 per unit = $2,000 
I = 50 units * $100 per unit = $5,000 
E = 100 units * $150 per unit = $15,000 
Total quality cost = P + A + I + E = $5,000 + $2,000 + $5,000 + $15,000 = $27,000 
Therefore, the closest answer is C) $28,500.

Business Solutions Corporation Business Solutions Corporation Is a Manufacturer of a Versatile