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. Therefore, costs of conformance total $50,000 + $47,000 = $97,000.

United Insurance Agency Incurred the Following Activity Costs Related to Service