Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 11

Listed below are selected items from the cost-of-quality (COQ) report for Watson Products for last month.

Category	Amount
Rework	$ 725
Equipment maintenance	1,154
Product testing	786
Field-service costs	560
Spoilage	459
Product liability insurance	780
Product repair	695

What is Watson’s total prevention and appraisal cost for the month?

Step 1 of 2

Cost of quality:

Quality costs are associated with activities across the value chain of a manufacturing company. Quality related costs are classified and reported in the cost of quality reports.

Prevention costs:

Prevention costs are incurred in the production process to decrease the occurrence of defective products.

Appraisal costs:

Appraisal costs are the costs incurred to measure and analyze the output produced according to the specifications.