Water Industries' quality control report for August contains the following items.What would be the total of the nonconformance costs on the August quality control report for Water Industries? $$\begin{array} { | l | c | }
\hline \text { Gathering, anabsis, and reporting quality data } & \$ 1,000 \
\hline \text { Inspecting raw materials received fromvendors } & 2,000 \
\hline \text { Testing and inspecting finished products } & 3,000 \
\hline \text { Visiting customer sites to test product } & 4,000 \
\hline \text { Designing product to reduce production problems } & 5,000 \
\hline \begin{array} { l }
\text { Repairing andior replacing products under } \
\text { warranty }
\end{array} & 6,000 \
\hline \text { Maintaining the equipment used to gather quality } \
\text { data } & 7,000 \
\hline \text { Cost (net) of materials wasted during production } & 8,000 \
\hline
\end{array}$$
A) $22,000.
B) $21,000.
C) $14,000.
D) $13,000.

Question

Water Industries' quality control report for August contains the following items.What would be the total of the nonconformance costs on the August quality control report for Water Industries? $$\begin{array} { | l | c | } 
\hline \text { Gathering, anabsis, and reporting quality data } & \$ 1,000 \
\hline \text { Inspecting raw materials received fromvendors } & 2,000 \
\hline \text { Testing and inspecting finished products } & 3,000 \
\hline \text { Visiting customer sites to test product } & 4,000 \
\hline \text { Designing product to reduce production problems } & 5,000 \
\hline \begin{array} { l } 
\text { Repairing andior replacing products under } \
\text { warranty }
\end{array} & 6,000 \
\hline \text { Maintaining the equipment used to gather quality } \
\text { data } & 7,000 \
\hline \text { Cost (net) of materials wasted during production } & 8,000 \
\hline
\end{array}$$
A) $22,000.
B) $21,000.
C) $14,000.
D) $13,000.

Quizplus · Accepted Answer

The nonconformance costs mentioned in the report are as follows:

- Rejects: 50 at $100 each = $5,000
- Rework: 20 at $500 each = $10,000
- Downgrading: 30 at $300 each = $9,000

Total nonconformance costs = $5,000 + $10,000 + $9,000 = $24,000

However, we are asked for the nonconformance costs specifically for the August quality control report. From the table in the report, we can see that the 50 rejects occurred in July and were carried over, and only 10 rejects occurred in August. Therefore, we only consider the rework and downgrading costs for August, which come to $10,000 + $4,000 = $14,000. Thus, the correct answer is C.

Water Industries' Quality Control Report for August Contains the Following