Bradford Inc.
Bradford Inc. manufactures and sells digital cameras. Bradford’s management team has begun an intensive program whereby more time and effort are to be focused on product quality than were focused on in the past. The following data has been compiled regarding expected quality costs in the upcoming year:
$$\begin{array} { l r }
\text { Product quality audits } & \$ 60000 \
\text { Quality training } & 50000 \
\text { Rework costs } & 80000 \
\text { Warranty claims } & 40000 \
\text { Inspection of incoming materials } & 25000 \
\text { Scrap costs } & 20000 \
\text { Statistical process control } & 35000
\end{array}$$
-What are Bradford's total external failure costs?

Question

Bradford Inc.
Bradford Inc. manufactures and sells digital cameras. Bradford’s management team has begun an intensive program whereby more time and effort are to be focused on product quality than were focused on in the past. The following data has been compiled regarding expected quality costs in the upcoming year:
$$\begin{array} { l r } 
\text { Product quality audits } & \$ 60000 \
\text { Quality training } & 50000 \
\text { Rework costs } & 80000 \
\text { Warranty claims } & 40000 \
\text { Inspection of incoming materials } & 25000 \
\text { Scrap costs } & 20000 \
\text { Statistical process control } & 35000
\end{array}$$
-What are Bradford's total external failure costs?

Quizplus · Accepted Answer

External failure costs are costs associated with defects found after the product reaches the customer, such as warranty claims. Here, the only external failure cost listed is warranty claims at $40,000.

Bradford Inc -What Are Bradford's Total External Failure Costs? A) $ 40

Bradford Inc -What Are Bradford's Total External Failure Costs?
A) $ 40