From the above schedule of activity costs, determine the internal failure costs.
A) $37,000
B) $25,000
C) $8,000
D) $33,000

Question

From the above schedule of activity costs, determine the internal failure costs.
A) $37,000 
B) $25,000 
C) $8,000 
D) $33,000

Quizplus · Accepted Answer

Internal failure costs refer to costs incurred due to defects or failures before the product is delivered to the customer. From the given schedule, the following costs can be considered as internal failure costs:

- Rework labor: $12,000
- Scrap: $15,000
- Material review: $6,000

Total internal failure costs = $12,000 + $15,000 + $6,000 = $33,000

Therefore, the correct answer is D) $33,000.

From the Above Schedule of Activity Costs, Determine the Internal