| Course | MT475 Quality Management |
|---|---|
| Unit | Unit 3 |
| Paper type | Cost of quality report |
| Length | About 890 words, 6 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Business Administration |
| Updated | October 2026 |
Free sample paper for MT475 Unit 3
$2.24 Million, Mostly After the Fact: An MT475 Unit 3 Cost of Quality Report for a Skylight Plant
[Student Name]
Purdue University Global
MT475: Quality Management
Unit 3 Cost of Quality Report
[Instructor Name]
[Date]
Overlook Skylight Company, its accounts and every figure are composite; the sources cited are real.
The Summary
Overlook Skylight Company's quality costs for fiscal 2025 total $2,237,000. That equals 4.51 percent of $49.6 million in sales and about $13.98 for each of the 160,000 skylights shipped. Prevention costs were $240,000, 10.7 percent of the total. Appraisal costs were $320,000, 14.3 percent. Internal failure costs were $692,000, 30.9 percent. External failure costs were $985,000, 44.0 percent.
The summary table opens the report because a manager reading one page needs the total and its split. The pattern is the finding: three-quarters of quality spending happens after a defect has already been made, and almost half after the customer has it.
The Four Categories
The report uses the prevention, appraisal and failure model that Feigenbaum (1956) helped establish and that later quality cost practice formalized (Campanella, 1999). Prevention money goes into keeping defects from being made: training, maintenance and planning. Appraisal money pays for checking work: inspection, testing and calibration. Internal failures are defects caught inside the plant, and external failures are defects a dealer or homeowner finds after shipment.
Schedule A: Prevention, $240,000
Operator training in welding and glazing, $96,000. Preventive maintenance on the frame welders and corner cleaners, $82,000. Quality planning, including the quality engineer's time spent on process design and supplier qualification, $62,000.
Schedule B: Appraisal, $320,000
The water test, in which every skylight is sprayed under pressure before packing, $188,000 in labor and equipment. Final inspection, $74,000. Incoming inspection of insulated glass units and extrusions, $41,000. Calibration of lab gauges, $17,000.
Schedule C: Internal Failure, $692,000
Remakes of skylights that failed inspection or the water test, $412,000, using the remake costs from the Unit 2 log. Scrap vinyl extrusion and glass, $186,000. Rework labor on units repaired rather than remade, $94,000.
Schedule D: External Failure, $985,000
Warranty service calls, $388,000, most for leaks reported in the first two years. Replacement glass and frames shipped for warranty claims, $274,000. Installer labor reimbursed to dealers for warranty work, $231,000; a skylight repair means a second trip onto a customer's roof. Freight and handling for returns, $92,000.
Every dollar of external failure includes a trip back onto a customer's roof.
Lost Business, Reported Beside the Total
One dealer in Ohio moved most of its orders to a rival late in the year after a run of leak complaints. Lost contribution from that dealer is estimated at about $380,000. It is reported beside the total, not inside it, because it is an estimate of something that did not happen, sales that would have occurred, rather than a cost the accounts recorded. Mixing it into the total would make the measured figure less trustworthy. Campanella (1999) notes that lost sales are among the largest quality costs and the hardest to measure, which is why many reports show them separately.
What the Pattern Suggests
A plant spending 75 percent of its quality budget on failure is paying for defects rather than preventing them. The usual lesson of quality cost analysis is that moving money toward prevention reduces total cost, because each defect prevented saves its appraisal and failure costs. For Overlook, the Unit 2 analysis already points to two places where prevention could pay: weld quality and wrong-size orders. Juran and Godfrey (1999) caution that the relationship between prevention spending and failure costs is not automatic; prevention money must be spent on the causes that drive failures, which is what the later units test.
How the Figures Were Gathered
No account in Overlook's ledger is labeled quality cost, so every figure was assembled from other accounts. Training and maintenance costs came from the human resources and maintenance budgets, with the quality share estimated from the hours logged against welding and glazing. Water-test costs came from the test booth's labor hours and its equipment depreciation. Remake costs came from the remake tickets, priced with the Unit 2 cost per remake. Warranty costs came from the warranty reserve's claims ledger, sorted by claim type. Where a cost was shared, such as the quality engineer's time, the share was estimated from a two-week time log and is marked as an estimate in the schedules. Juran and Godfrey (1999) note that most companies discover their quality costs only by assembling them this way, which is also why the first report is usually an underestimate.
What Management Could Do First
The report suggests three first steps. Spend part of next year's budget on prevention aimed at the two causes the Unit 2 analysis identified, welding and order entry. Track the four categories quarterly, so that a shift from failure toward prevention can be seen. And set a target for external failure, the costliest category, rather than for total quality cost, which can fall simply by cutting inspection.
Appendix: Reproducing the Sums
A short script in the appendix reads the four schedules, sums each category, computes each category's share of the total and divides the total by sales and by units shipped. It reproduces every figure in this report, so that the finance team can check the arithmetic and rerun it next year with new figures.
References
Campanella, J. (Ed.). (1999). Principles of quality costs: Principles, implementation, and use (3rd ed.). ASQ Quality Press.
Feigenbaum, A. V. (1956). Total quality-control. Harvard Business Review, 34(6), 93-101.
Juran, J. M., & Godfrey, A. B. (Eds.). (1999). Juran's quality handbook (5th ed.). McGraw-Hill.
What the MT475 Unit 3 assignment asks for
MT475 Unit 3 asks for a cost of quality report for a real or supplied organization. Open with a summary table giving the total, its share of sales and the split across prevention, appraisal, internal failure and external failure, since a manager may read only that page. Define the four categories in your own words and assign each cost line with a reason. Supporting schedules should list the items in each category. Explain where the figures came from, because most organizations do not record quality costs directly. Treat estimates such as lost sales carefully, reporting them separately from measured costs. Interpret the pattern, especially how much spending occurs after defects are made, and suggest first steps. An appendix that lets finance reproduce the sums strengthens the report. About five pages with one summary table and four schedules is a common format for this report.
How this MT475 Unit 3 example is built
Overlook's report begins with its summary table and the observation that three-quarters of quality spending comes after defects are made. A section defines the four categories, citing Feigenbaum and Campanella. Four schedules follow: prevention through training and maintenance, appraisal through the water test and inspection, internal failure through remakes and scrap, and external failure through warranty calls and installer labor, under a highlighted line about trips back onto customers' roofs. Lost dealer contribution is shown beside the total with a reason. A section on the pattern links prevention to the Unit 2 causes, with Juran and Godfrey's caution that prevention must target real causes. Another explains how each figure was gathered from other accounts. First steps for management and an appendix with a reproducing script close the report.
Reading the MT475 Unit 3 grading rubric
Cost of quality reports earn their marks through accurate classification and useful interpretation. Instructors credit a summary table that a manager could act on and schedules that show each line's category. Assigning costs to categories with reasons, rather than by guess, shows understanding of the model. Describing how each figure was pulled from other accounts earns credit, since quality costs almost never sit in one ledger line. Handling estimates like lost sales separately from measured costs shows judgment. Interpreting the balance between prevention and failure, and linking it to known causes, turns a table into analysis. Practical first steps make the report useful. Reproducible arithmetic is valued highly. Sources on quality cost models should support the categories and their interpretation.
MT475 Unit 3 help from the desk
Weak Unit 3 reports list costs without classifying them or classify them inconsistently, placing inspection under prevention, for example. Another frequent problem mixes estimates of lost sales into the measured total, making the whole figure hard to trust. Students often present the four totals without interpreting the pattern. External failure costs are commonly understated because warranty and service costs sit in other departments. Recommendations tend to say spend more on prevention without saying where. Before submitting, check each line against the four definitions and ask whether the cost would exist if no defects were ever made. If it would not, it is a failure cost. Then make sure your first step targets a specific cause, not prevention in general.
Get an MT475 Unit 3 example written to your instructions
Attach the spending data or case from your Unit 3 prompt, with its instructions and rubric. A composite report is sent back classifying each cost into the four categories with reasons, totaling them by script, separating estimates from measured figures and arguing from the balance. The first custom sample is free and generally takes 24-48h. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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MT475 Unit 3 questions, answered
What goes into each of the four cost of quality categories?
Prevention covers spending that stops defects happening: training, design review, supplier development, planning. Appraisal covers finding defects: inspection, testing, calibration. Internal failure covers defects caught before the customer: scrap, rework, remakes, downtime. External failure covers defects the customer finds: warranty, returns, service calls, lost business. Your textbook may list further examples under each.
Should lost customers be counted in the report?
Usually as an estimate reported separately. Lost business is often the largest external failure cost and the hardest to measure, so leaving it out understates the problem while mixing it into measured totals overstates certainty. Show how the estimate was made, lost volume times contribution per unit for example, and keep it beside the total.
What is a typical cost of quality as a share of sales?
Figures vary widely by industry and by how thoroughly costs are counted, and textbooks quote ranges rather than a standard. What matters more in MT475 is the internal balance: when failure costs dwarf prevention, the organization is usually paying to fix problems it could prevent. Your case data sets the figure; the argument comes from the proportions.
Where can I find a free MT475 Unit 3 sample paper?
This page carries the complete MT475 Unit 3 report sorting a composite skylight plant's $2.24 million of quality costs into four categories.
Why is lost dealer business reported outside the total in the MT475 Unit 3 sample?
It is an estimate of sales that did not happen rather than a recorded cost, so including it would make the measured total less trustworthy.