MAS PRACTICE SET
PROBLEM 1
Gagnon Company’s quality cost report is to be based on the following data:
Maintenance of test equipment …………………………………
$18,000
Test and inspection of incoming materials …………………
$73,000
Systems development ……………………………………………..
$29,000
Product recalls ………………………………………………………..
$91,000
Quality training ………………………………………………………
$25,000
Disposal of defective products ………………………………….
$55,000
Supervision of testing and inspection activities …………..
$24,000
Warranty repairs and replacements ……………………………
$58,000
Net cost of scrap …………………………………………………….
$23,000
Required:
Prepare a Quality Cost Report in good form with separate sections for prevention costs,
appraisal costs, internal failure costs, and external failure costs.
PROBLEM 2
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
