The Following Represents the Financial Information of Madison Tool Corporation,a

question 98

Essay

The following represents the financial information of Madison Tool Corporation,a manufacturer of testing equipment: $$\begin{array} { | l | r | } \hline & \text { May } \\\hline \text { Customer complaints } & \$ 11,200 \\\hline \text { Field testing } & 37,600 \\\hline \text { Materials ins pection } & 26,000 \\\hline \text { Preventive maintenance } & 54,000 \\\hline \text { Process inspection } & 6,600 \\\hline \text { Quality training } & 75,200 \\\hline \text { Rework } & 68,000 \\\hline \text { Scrap } & 7,400 \\\hline \text { Testing equipment } & 28,000 \\\hline \text { Warranty repairs } & 17,200 \\\hline\end{array}$$
Required:
a.Classify these items into prevention,appraisal,internal failure,or external failure costs.Determine the total cost of each category.

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Definitions:

Standard Costing System

A cost accounting method that assigns expected costs to products in order to estimate the cost of production and help with budget planning.

Direct Labour Hours

The total hours worked directly on a specific job or task by employees, often used to allocate labor costs to products or services.

Variances

Differences between planned, budgeted, or standard costs and actual costs in business operations.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials, labor, and manufacturing overhead.