Lipps Company manufactures custom-designed medical equipment for paramedic units.In May 2010,the company incurred the following costs of quality: $$\begin{array} { | l r |}
\hline \text { Product design costs } & \$ 8,600 \
\text { Product recall costs } & 5,200 \
\text { Product simulation costs } & 13,500 \
\text { Product testing costs } & 3,500 \
\text { Product warranty claims } & 2,000 \
\text { Scrap and rework costs } & 3,000 \
\hline
\end{array}$$
Total quality costs of nonconformance for May were

Question

Lipps Company manufactures custom-designed medical equipment for paramedic units.In May 2010,the company incurred the following costs of quality: $$\begin{array} { | l r |} 
\hline \text { Product design costs } & \$ 8,600 \
 \text { Product recall costs } & 5,200 \
\text { Product simulation costs } & 13,500 \
\text { Product testing costs } & 3,500 \
\text { Product warranty claims } & 2,000 \
\text { Scrap and rework costs } & 3,000 \
\hline
\end{array}$$
 Total quality costs of nonconformance for May were

Quizplus · Accepted Answer

The total quality costs of nonconformance for May can be calculated as follows:
Total quality costs of nonconformance = External failure costs + Internal failure costs
External failure costs = $4,500 + $4,200 = $8,700
Internal failure costs = $1,500 + $200 = $1,700
Total quality costs of nonconformance = $8,700 + $1,700 = $10,200. 
Therefore, the best choice is C as it reflects the calculated total quality costs of nonconformance.

Lipps Company Manufactures Custom-Designed Medical Equipment for Paramedic Units Total Quality Costs of Nonconformance for May Were A) $24,200

Lipps Company Manufactures Custom-Designed Medical Equipment for Paramedic Units Total Quality Costs of Nonconformance for May Were
A) $24,200