Question

A list of activities that generate quality costs is provided below. For each activity, indicate whether it relates to a prevention (P), appraisal (A), internal failure (I), or external failure (E) activity.

1. Inspecting raw materials
2. Training workers in quality techniques
3. Collecting data on a manufacturing process
4. Overtime labor to rework products
5. Cost of additional materials to rework a product
6. Inspecting finished goods inventory
7. Scrapping defective goods
8. Lost sales due to customer dissatisfaction

Short answer

Activity 1, 3, and 6 are denoted as the appraisal. There is an only one-one activity denoted as prevention (2) and external failure (8). Rest activities 4, 5, and 7 are internal failures.

Step-by-step solution

Meaning of Prevention Cost

Prevention costs refer to the expenditures made by an organization to identify and remove any flaws in the production process. Training and auditing, as well as developing a quality system, are included in these costs.

Indicating and explaining each activity

S.no.	Activity	Explanation
1	Inspecting raw materials	Inspection of raw materials refers to detailed inspection of materials which is possible only through appraisalcost.
2	Training workers in quality techniques	A well-prepared worker will create a positive state of mind toward their work; their victory leads them to create a more grounded work ethic. So it will be indicated as prevention.
3	Collecting data on a manufacturing process	By regularly storing process information and the date and time, producers can easily access to data on how generation operations are going. So it is denoted as the appraisal.
4	Overtime labor to rework products	Over time labor to make products work again leads to internal failure cost because it occurs when defects are first found for the transfer of an item or benefit to the customer.
5	Cost of additional materials to rework a product	The cost of additional materials to recreate a product only leads to an increase in cost due to the inefficiency of the internal process, so it should be denoted as an internal failure.
6	Inspecting finished goods inventory	Appraisal fees are paid by businesses as part of a quality control handles to confirm that their items and administration meet customer and administrative criteria. So, inspecting finished goods is denoted as the appraisal.
7	Scrapping defective goods	The defective product was made using labor, clothing, and (usually) overhead. It is not possible to repair the thing cost-effectively. Various scrapes, decay, and defects are among the titles. So scrapping defective goods are an internal failure.
8	Lost sales due to customer dissatisfaction	When a product is sold to a customer and after-sales, if the cost arises resulting from the disappointment of the item is known as the external failure cost. So lost sales due to customer dissatisfaction is denoted as an external failure.