Acme Materials Company manufactures and sells synthetic coatings that can withstand high temperatures. Its primary customers are aviation manufacturers and maintenance companies. The following table contains financial information pertaining to cost of quality in 2016 and 2017 in thousands of dollars:

Requirements
1. Classify the cost items in the table into Cost-of-Quality (COQ) categories.
2. Calculate the ratio of each cost of quality category to revenues in each of the two years.
3. Comment on the results.
4. In addition to the financial measures listed in the table, what nonfinancial measures might Acme monitor in its effort to attain TQM?
5. Are financial or non-financial quality measures likely of more used to: (a) managers? (b) operating personnel? Why?

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Sales Materials inspection Production inspection Finished product inspection Preventive equipment maintenance Scrap (Net) Warranty repairs Product design engineering Vendor certification Direct costs of returned goods Training of factory workers Product testing-equipment maintenan Product testing labor Field repairs Rework before shipment Product-liability settlement Emergency repair and maintenance 2016 2017 $16,000 $20,000 60 125 70 60 300 450 270 60 80 140 60 90 40 200 60 75 300 160 250 20 500 700 150 10 275 40 60 210 70 240 360 200