US CMA Part 1 · Chapter 4 · Question 18 of 22
A manufacturer's quality-related costs for the year include: rework $42,000; scrap $18,000; final inspection $25,000; warranty claims $31,000; design reviews $12,000. What are total internal failure costs?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) $60,000
Explanation
Internal failure costs are those incurred when defects are detected before shipment: rework $42,000 + scrap $18,000 = $60,000. Inspection is an appraisal cost, warranty claims are external failure costs and design reviews are prevention costs.
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