Quality cost

This topic has 2 replies, 2 voices, and was last updated 7 years ago by Ken Garrett.

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November 17, 2018 at 2:55 am #485046
cys94
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Dear tutor,

If the normal cost of the raw material is $500 and the same raw material of high quality is $800. Then for the prevention cost (quality cost), is it $800 or $300?
November 17, 2018 at 2:58 am #485047
cys94
Member
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My question assumes that the company buys the high quality raw materials in order to minimise the number of rejected products.
November 17, 2018 at 7:16 am #485053
Ken Garrett
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Buying poor material costs $500. To ensure that flawed material does not entet production costs an additional $300, so the cost of preventing problems with material is $300.
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