Handicomputer Company was having significant quality problems in its manufacturing plant. To remedy the situation, management implemented various up-front procedures and programs that were expected to reduce the production of bad units to acceptable (normal) levels and benefit the firm financially. If the procedures and programs functioned as intended, what is likely true about the amounts Handicomputer incurred for prevention cost, internal failure cost, and external failure cost respectively?
A)increase, increase, decrease.
B)increase, increase, increase.
C)increase, decrease, decrease.
D)decrease, decrease, decrease.
E)increase, decrease, increase.

Question

Quizplus · Accepted Answer

Implementing up-front procedures and programs to reduce the production of bad units would increase prevention costs (to prevent future defects), decrease internal failure costs (by catching defects before they reach the customer) and decrease external failure costs (by preventing defects from reaching the customer and avoiding costly recalls or lawsuits).

Handicomputer Company Was Having Significant Quality Problems in Its Manufacturing