Rehab Health Care, LLC, incurred the service-related activity costs for the month that follow.
Total sales..................................................... $40,000
Customer complaint processing.............................. 1,000
Employee training................................................ 400
Reinspection and retesting...................................... 500
Design review of service procedures.......................... 300
Technical support................................................ 200
Investigation of service defects................................ 800
Sample testing of vendors.......................................100
Inspection of supplies........................................... 150
Quality audits..................................................... 250
Quality-related downtime...................................... 300
Prepare an analysis of the costs of quality for Rehab Health Care. Categorize the costs as (a) costs of conformance, with subsets of prevention costs and appraisal costs, or (b) costs of nonconformance, with subsets of internal failure costs and external failure costs. Compute the percentage of sales represented by prevention costs, appraisal costs, total costs of conformance, internal failure costs, external failure costs, total costs of nonconformance, and total costs of quality. Also compute the ratio of costs of conformance to total costs of quality and the ratio of costs of nonconformance to total costs of quality.