Faust Company's quality cost report is to be based on the following data:

-What will be the total external failure cost appearing on the quality cost report?
A) $59,000.
B) $79,000.
C) $22,000.
D) $403,000.

Question

Faust Company's quality cost report is to be based on the following data:

-What will be the total external failure cost appearing on the quality cost report?
A) $59,000. 
B) $79,000. 
C) $22,000. 
D) $403,000.

Quizplus · Accepted Answer

External failure costs typically include costs related to warranty claims, repairs, and returns. The total external failure cost is $59,000, which is the sum of warranty claims ($30,000) and repairs and returns ($29,000).

Faust Company's Quality Cost Report Is to Be Based on the Following