Multiple Choice.

1. C
2. A
3. B
4. C
5. A
6. B
7. C
8. A
9. D
10. C
11. C
12. B
13. A
14. B
15. C
16. A
17. C
18. B
19. D
20. A
21. D
22. C
23. A
24. A
25. B
26. A
27. A
28. B
29. C
30. D
Problems
1. Prevention costs
Technical support provided to suppliers P75,000
Quality data gathering, analysis, and reporting P45,000
Total P120,000
2. Appraisal costs
Supervision of testing and inspection activities P29,000
Test and inspection of materials P23,000
Depreciation of test equipment P24,000
Total P76,000
3. Internal failure costs
Net cost of scraps P57,000
Disposal of defective products P94,000
Total P151,000

4. External failure costs

Warranty repairs and replacements P12,000
Liability arising from defective products P79,000
Total P91,000

5. ((45,500+72,500+100,000)*(4,000/10,000))/2,000 = 43.60
6. ((45,500+72,500+100,000)*(4,000/10,000))/12,000 = 7.27
7. ((45,500+72,500+100,000)*(2,000/10,000))/6,000 = 7.27

8-10.