$\text { Eacker Company's quality cost report is to be based on the following data: }$

question 178

Multiple Choice

$\text { Eacker Company's quality cost report is to be based on the following data: }$
$\begin{array}{|l|r|}\hline \text { Quality engineering } & \$ 72,000 \\\hline \text { Net cost of spoilage } & \$ 70,000 \\\hline \text { Re-entering data because of keying errors } & \$ 88,000 \\\hline \text { Test and inspection of incoming materials } & \$ 68,000 \\\hline \text { Test and inspection of in-process goods } & \$ 97,000 \\\hline \text { Technical support provided to suppliers } & \$ 83,000 \\\hline \text { Maintenance of test equipment } & \$ 31,000 \\\hline \text { Product recalls } & \$ 73,000 \\\hline \text { Warranty repairs and replacements } & \$ 46,000 \\\hline\end{array}$
- What will be the total external failure cost appearing on the quality cost report?

• A) $119,000.
• B) $143,000.
• C) $277,000.
• D) $628,000.

---

Definitions:

Competitive Firm

A firm operating in a market with many competitors, where prices are determined by supply and demand forces.

Economic Profits

The difference between total revenue and total economic costs (including both explicit and implicit costs), representing surplus or profit not achievable in perfect competition.

Competitive Industries

Industries characterized by many firms competing for market share, leading to innovation and efficient resource allocation.

Production Costs

Expenses incurred during the process of creating a good or service, including labor, raw materials, and overhead costs.