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

19.1%Total costs of quality = Prevention + Appraisal + Internal failure + External failure = $44,000 + $47,000 + $36,000 + $64,000 = $191,000. Total costs of quality as a percentage of sales = ($191,000 / $1,000,000) * 100% = 19.1%.

Internal Reports on Quality at the Acme Publishing Company Generated