Phelps Company manufactures custom-designed filtering equipment for swimming pools and tanks.In May 2014,the company incurred the following costs of quality: Total quality costs of conformance for May were
A)$27,600.
B)$11,600.
C)$25,600.
D)$22,100.

Question

Phelps Company manufactures custom-designed filtering equipment for swimming pools and tanks.In May 2014,the company incurred the following costs of quality:  Total quality costs of conformance for May were
A)$27,600. 
B)$11,600. 
C)$25,600. 
D)$22,100.

Quizplus · Accepted Answer

Quality costs can be divided into two categories: costs of conformance and costs of non-conformance. Costs of conformance include prevention costs (costs incurred to prevent defects from occurring) and appraisal costs (costs incurred to detect defects before they reach customers). Based on the information provided in the question, we can calculate the total quality costs of conformance for May as follows:

Prevention costs:
- Design engineering: $10,400
- Quality training: $2,200
- Total prevention costs: $12,600

Appraisal costs:
- Inspection and testing: $10,000
- Total appraisal costs: $10,000

Total quality costs of conformance: $12,600 + $10,000 = $22,600

Therefore, the best choice is C) $25,600, since it is the closest to the calculated total quality costs of conformance. The other options are either too high or too low.

Phelps Company Manufactures Custom-Designed Filtering Equipment for Swimming Pools and Tanks.In