Question 1 Report
Read the information about Arctic Spoon, a business producing chilled soups for restaurants.
During a routine quality check, a manager finds that several tubs have loose lids. The tubs cannot be sold because food may leak during delivery. The production manager records the loss before deciding whether extra staff training is needed.
(a) Identify which one of the following is a cost of poor quality for Arctic Spoon. [1]
A. Income received from selling soup to a new restaurant
B. Money spent replacing soup tubs rejected by a customer
C. Profit earned after the business increases its selling price
D. Payment received from a supplier for returning unused ingredients
(a) A cost of poor quality is money spent replacing soup tubs rejected by a customer. [1]
Rejected tubs must be replaced because of the loose lids, so the business incurs an extra cost caused by a quality failure. Income, profit and payments received are not costs of poor quality.
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