Gagnet Company’s quality cost report is to be based on the following data:
|
Liability arising from defective products |
$82,000 |
|
Final product testing and inspection |
$40,000 |
|
Returns arising from quality problems |
$24,000 |
|
Technical support provided to suppliers |
$52,000 |
|
Disposal of defective products |
$98,000 |
|
Maintenance of test equipment |
$53,000 |
|
Systems development |
$67,000 |
|
Depreciation of test equipment |
$11,000 |
|
Debugging software errors |
$87,000 |
Required:
Prepare a Quality Cost Report in good form with separate sections for prevention costs, appraisal costs, internal failure costs, and external failure costs.