- What Will Be the Total External Failure Cost Appearing

question 30

Multiple Choice

$\begin{array}{l}\text { Faust Company's quality cost report is to be based on the following data: }\\\begin{array} { | l | r | } \hline \text { Quality engineering } & \$ 68,000 \\\hline \text { Quality circles } & \$ 35,000 \\\hline \text { Supervision of testing and inspection activities } & \$ 72,000 \\\hline \text { Net cost of scrap } & \$ 76,000 \\\hline \text { Test and inspection of in-process goods } & \$ 6,000 \\\hline \text { Liability arising from defective products } & \$ 3,000 \\\hline \text { Warranty repairs and replacements } & \$ 56,000 \\\hline \text { Debugging software errors } & \$ 68,000 \\\hline \text { Rework labour and overhead } & \$ 19,000 \\\hline\end{array}\end{array}$
- What will be the total external failure cost appearing on the quality cost report?

• A) $59,000.
• B) $79,000.
• C) $22,000.
• D) $403,000.

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Definitions:

Budget Standards

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Master Budget

An all-encompassing financial plan that combines all individual budgets related to sales, cost of goods sold, operations, and capital expenditures.

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The highest-ranking executive in a company, responsible for making major corporate decisions.