Cost of Quality Report: External Failure Cost Category

What is the total cost of quality in the external failure cost category?

What expenses fall under the external failure cost category in the Cost of Quality report?

Total Cost of Quality in External Failure Cost Category

The total cost of quality in the external failure cost category is $500,000.

To determine the total cost of quality in the external failure cost category, we need to identify the expenses that fall under this specific category.

In the Cost of Quality report provided, the following expenses are considered external failures:

• Warranty costs for warranty claims: $300,000
• Recall of batch #2894: $200,000

To find the total cost of quality in the external failure cost category, we simply sum up these expenses:

Total cost of quality in the external failure cost category = $300,000 + $200,000 = $500,000

Therefore, the correct answer to the question is option A. $500,000.