Assume that the cost data available to you for a certain per

Assume that the cost data available to you for a certain period are limited to the following: Final test $18000 Loss on disposition of surplus stock $15,000 Field warranty costs $275000 Scrap $150,000 Customer returns $25,000 Planning for inspection $16,000 What is the total Quality Cost?

Solution

First, when determining the total cost of quality it really is not possible to do so because of intangible costs as well that cannot really be measured. However, firms and companies try to quantify it by adding all the costs it incurs associated with quality.

In this case, all the costs are associated with quality so add them together. The total cost will be:

Total cost of quality = $499,000

Keep in mind this does not include intangible costs that cannot be measure such as: