Chapter 12, Problem 12.2E

1.

To determine

Introduction: When the product meets its design specifications and does not contain any defects it is said to have high-quality conformance. The company incurs several costs to reduce the defects in the product which lowers the quality of conformance. This can be classified into prevention costs, appraisal costs, internal failure costs, and external failure costs.

To classify: Costs into prevention costs, appraisal costs, internal failure costs, and external failure costs.

2.

To determine

Introduction: The prevention costs and the appraisal costs are costs incurred to avoid the poor quality of conformance. The internal failure costs and the external failure costs are incurred after the poor quality of conformance has occurred.

The costs incurred to keep the poor quality of conformance from occurring and the costs incurred because the poor quality of conformance has occurred.