Internal reports on quality at the Acme Publishing Company generated the following information for the Trade Division for the first three months of the year:
$\begin{array}{ll}\text { Total sales }&\$1,000,000\
\text { Costs of quality: }\
\text { Prevention } & 44,000 \
\text { Appraisal } & 47,000 \
\text { Internal failure } & 36,000 \
\text { External failure } & 64.000
\end{array}$
Compute the total costs of quality as a percentage of sales.

Question

Internal reports on quality at the Acme Publishing Company generated the following information for the Trade Division for the first three months of the year:
 $\begin{array}{ll}\text { Total sales }&\$1,000,000\
\text { Costs of quality: }\
\text { Prevention } & 44,000 \
\text { Appraisal } & 47,000 \
\text { Internal failure } & 36,000 \
\text { External failure } & 64.000
\end{array}$ 
Compute the total costs of quality as a percentage of sales.

Quizplus · Accepted Answer

The total costs of quality are the sum of prevention, appraisal, internal failure, and external failure costs: $44,000 + 47,000 + 36,000 + 64,000 = 191,000$. As a percentage of total sales (\$1,000,000), this is $191,000 / 1,000,000 \times 100 = 19.1\%$.

Internal Reports on Quality at the Acme Publishing Company Generated