14-4 QUALITY COST CLASSIFICATION

1. Biaya pencegahan (Prevention cost)

1) The cost of evaluating and certifying suppliers

2) Stopping work to correct process malfunction (discovered using statistical process

control procedures)

2. Biaya penilaian (appraisal cost)

1) Testing products in the field

2) Discarding products that cannot be reworked

3) Inspection of incoming materials

4) Inspecting and testing prototypes

5) Engineering resources used to help selected suppliers improve their product quality

3. Biaya kegagalan internal (internal failure cost)

1) Inspection of reworked units

2) Inspecting and testing a newly developed product (not yet being sold)

3) Retesting a reworked product

4) Lost sales because of recalled products

5) Redesigning a product to eliminate the need to use an outside component with a

high defect rate

6) Repairing products in the field

7) Correcting a design error discovered during product development

7) 20. Packaging inspection

4. Biaya kegagalan eksternal (eksternal failure cost)

1) Repairing a computer still under warranty

2) Discount allowed to customers because products failed to meet customer specifi-

cations

3) Goods returned because they failed to meet specifications

4) Purchase order changes

5) Replacing a defective product

14-6 QUALITY COST REPORT

Benton Company reported sales of $8,100,000 in 2007. At the end of the year, the following quality
costs were reported:

 Design review $405,000

 Recalls 135,000
 Reinspection 67,500
 Materials inspection 54,000
 Quality training 135,000
 Process acceptance 67,500
 Scrap 47,250
 Lost sales 270,000
 Product inspection 40,500
 Returned goods 128,250

Required:

1. Prepare a quality cost report.

2. Prepare a graph (pie chart or bar graph) that shows the relative distribution of

quality costs, and comment on the distribution.