- What Will Be the Total External Failure Cost Appearing

question 163

Multiple Choice

$\begin{array}{l}\text { Eade Company's quality cost report is to be based on the following data: }\\\begin{array} { | l | r | } \hline \text { Systems development } & \$ 32,000 \\\hline \text { Final product testing and inspection } & \$ 13,000 \\\hline \text { Quality data gathering, analysis, and reporting } & \$ 11,000 \\\hline \text { Net cost of scrap } & \$ 62,000 \\\hline \text { Returns arising from quality problems } & \$ 59,000 \\\hline \text { Amortization of test equipment } & \$ 57,000 \\\hline \text { Rework labour and overhead } & \$ 18,000 \\\hline \text { Test and inspection of incoming materials } & \$ 40,000 \\\hline \text { Product recalls } & \$ 36,000 \\\hline\end{array}\end{array}$
- What will be the total external failure cost appearing on the quality cost report?

• A) $54,000.
• B) $95,000.
• C) $175,000.
• D) $328,000.

Analyze and prepare basic adjusting entries related to prepaid expenses, accrued expenses, and depreciation.

Grasp the concept of accrued revenues and their treatment in the accounting cycle.

Understand the process and implications of liquidating a partnership, including the distribution of cash and handling of deficit capital account balances.

Identify the rights of personal creditors during the liquidation of a partner’s interest, especially when a partner is insolvent.

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Definitions:

Balance Sheet

A report that outlines the total assets, obligations, and equity of shareholders of a company at a given time.

Par Value

The face value of a bond or stock as specified by the issuing company, which has little relation to its market value.

Market Value

The price at which an asset would trade in a competitive auction setting.

Common Stock

A type of equity security that represents ownership in a corporation, entitling holders to vote on corporate matters and receive dividends.