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NEW QUESTION: 1
All of the following are generally included in a cost-of-quality report except:
A. Design engineering.
B. Lost contribution margin.
C. Supplier evaluations.
D. Warranty claims.
Answer: B
Explanation:
A cost-of-quality report includes most costs related to quality, including the costs of external failure, internal failure, prevention, and appraisal. Lost contribution margins from poor product quality are external failure costs that normally do not appear on a cost-of-quality report because they are opportunity costs. Opportunity costs are not usually recorded by the accounting system, thereby understating the costs of poor quality. Lost contribution margins from reduced sales, market share, and sales prices are external failure costs that are also not usually included in a cost-of-quality report.
NEW QUESTION: 2
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