- What Will Be the Total Internal Failure Cost Appearing

question 8

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 internal failure cost appearing on the quality cost report?

• A) $54,000.
• B) $75,000.
• C) $80,000.
• D) $121,000.

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Definitions:

Standard Distribution Table

A tool used in statistics that shows the probabilities associated with a standard normal distribution.

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A statistical measure indicating the value below which a given percentage of observations in a group fall.

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A mathematical function showing the number of instances in which a variable attains values within specified intervals.