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Hi,
For part A of this question I classified production testing under prevention costs rather than appraisal costs and classified transportation costs under internal failures rather than external failure costs. As a result my total costs is different to the solution. Would I lose marks for this in the exam as its unclear from the solution whether there is scope for this to be different?
Thanks,
Ed
I think that their ‘product testing’ could be calssified as prevention. It depends what they mean. As part of marketing research, product testing is used before production to ensure that the product is liked by customers and that it works well. So if that’s what they mean, the that would be prevention.
However, I find it hard to see how transportation could be anything but an external failure as the assumption would be that units failing internally did ot have to be transferred anywhere.
At most you would lose a couple of marks.
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