1. Which of the following would be classified as an external failure cost on a quality cost report?
A. Depreciation of test equipment.
B. Re-entering data because of keying errors.
C. Rework labor and overhead.
D. Liability arising from defective products.
2. If the level of activity increases within the relevant range:
A. variable cost per unit and total fixed costs also increase.
B. fixed cost per unit and total variable cost also increase.
C. total cost will increase and fixed cost per unit will decrease.
D. variable cost per unit and total cost also increase.