Problem - The expected sales for Johnson Company is $50 million for the current year. A quality improvement program is recently implemented by the management. Following data is accumulated alter several months:
Warranty claims - $60,000
Rework costs - 200,000
Quality training - 305,000
Inspection of incoming materials - 900,000
Statistical process control - 400,000
Scrap costs - 100,000
Product quality audits - 250,000
Requirements:
A. Calculate total prevention costs.
B. Calculate total appraisal costs.
C. Calculate total internal failure costs.
D. Calculate total external failure costs.