Which of the Following Would Be Classified as an External

question 27

Multiple Choice

Which of the following would be classified as an external failure cost on a quality cost report?

• A)Depreciation of test equipment.
• B)Re-entering data because of keying errors.
• C)Rework labor and overhead.
• D)Liability arising from defective products.

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Definitions:

Plantwide Predetermined

The determination of a single overhead rate that is applied throughout an entire plant or facility, irrespective of individual processes.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, maintenance, and salaries of support staff.

Machine-Hours

A measure of production output or activity based on the number of hours machines are operated.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to products based on a certain activity, such as labor hours or machine hours.