Glory Enterprises quality control report for August contains the following items:
$\begin{array}{ll}
\text {Liability costs associated with defective products}&\$10,000\
\text { Disposal costs of defective products failing inspection }&20,000\
\text {Disposal costs of raw materials failing inspection}&30,000\
\text { Quality training provided to workers } & 40,000 \
\text { Lost sales due to poor quality and defective products } & 50,000 \
\text { Advertising costs to offset perception of poor product quality } & 60,000 \
\text { Raw materials used to correct defects before product was sold } & 70,000 \
\text { Testing and inspecting a sample of finished goods } & 80,000
\end{array}$
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What would be the total of the external failure costs on the August quality control report for Glory Enterprises?
A) $70,000.
B) $110,000.
C) $120,000.
D) $140,000.

Question

Quizplus · Accepted Answer

External failure costs are those costs incurred after the product has been sold to the customer. In this case, the external failure costs are:Liability costs associated with defective products: $10,000Disposal costs of defective products failing inspection: $20,000Lost sales due to poor quality and defective products: $50,000Advertising costs to offset perception of poor product quality: $60,000Total external failure costs: $140,000

Glory Enterprises Quality Control Report for August Contains the Following