A Company Spends $12,000 a Year for Inspecting, $41,000 for Purchasing

question 44

Multiple Choice

A company spends $12,000 a year for inspecting, $41,000 for purchasing, and $22,000 for reworking products. A good estimate of nonvalue-added costs would be:

• A) $22,000
• B) $34,000
• C) $41,000
• D) $33,000
• E) $55,000

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Definitions:

Quality Control

The processes an organization uses to maintain its established quality standards.

Production

The process of creating goods and services, involving tasks such as design, raw materials sourcing, and manufacturing.

Standardization

The process of establishing common standards within an industry to ensure that products and services are consistent and compatible.