Adolphson Corporation has provided the following summary of its quality cost report for the last two years: On the basis of this report, which one of the following statements is most likely correct?
A) An increase in prevention and appraisal costs resulted in fewer defects, and therefore, resulted in a decrease in internal and external failure costs.
B) A decrease in internal and external failure costs resulted in less need for prevention and appraisal costs.
C) Quality costs such as scrap and rework decreased by 48%.
D) Quality costs such as returns and repairs under warranty decreased by 40%.

Question

Adolphson Corporation has provided the following summary of its quality cost report for the last two years:  On the basis of this report, which one of the following statements is most likely correct?
A) An increase in prevention and appraisal costs resulted in fewer defects, and therefore, resulted in a decrease in internal and external failure costs. 
B) A decrease in internal and external failure costs resulted in less need for prevention and appraisal costs. 
C) Quality costs such as scrap and rework decreased by 48%. 
D) Quality costs such as returns and repairs under warranty decreased by 40%.

Quizplus · Accepted Answer

The report shows that prevention and appraisal costs increased, while internal and external failure costs decreased in the last two years. This suggests that Adolphson Corporation invested in measures to prevent defects and improve quality, which resulted in fewer defects and lower costs associated with fixing them. Therefore, option A is the most likely correct statement. Options C and D are not supported by the information provided in the report. Option B is the opposite of what is indicated in the report.

Adolphson Corporation Has Provided the Following Summary of Its Quality