United Insurance Agency incurred the following activity costs related to service quality.
$\begin{array}{ll}\text { Total sales }&\$1,000,000\
\text { Costs of quality: }\
\text { Prevention } & 50,000 \
\text { Appraisal } & 47,000 \
\text { Internal failure } & 36,000 \
\text { External failure } & 64.000
\end{array}$
Costs of conformance total

Question

United Insurance Agency incurred the following activity costs related to service quality. 
$\begin{array}{ll}\text { Total sales }&\$1,000,000\
\text { Costs of quality: }\
\text { Prevention } & 50,000 \
\text { Appraisal } & 47,000 \
\text { Internal failure } & 36,000 \
\text { External failure } & 64.000
\end{array}$ 
Costs of conformance total

Quizplus · Accepted Answer

Costs of conformance include prevention and appraisal costs, which total $50,000 + $47,000 = $97,000. Adding in the internal failure costs of $36,000 gives a total of $97,000 + $36,000 = $133,000. However, since the question asks for the total costs of conformance, we need to subtract the appraisal costs, as they are already included in the prevention costs. Therefore, the total costs of conformance are $133,000 - $47,000 = $86,000.

United Insurance Agency Incurred the Following Activity Costs Related to Service