(( Control of quality costs: team activity) The following summary numbers have been taken from a quality cost report of British Furniture Company for 2006. The firm manufactures a variety of English furniture products.

The company is actively seeking to identify ways to reduce total quality costs. Its current strategy is to increase spending in one or more quality cost categories in hope of achieving greater spending cuts in other quality cost categories. In a team of three or four individuals, prepare an oral presenta¬ tion to answer the following questions:

a. Which spending categories are most susceptible to control by managers? Why?

b. Why is it more logical for the company to increase spending in the pre¬ vention cost and appraisal cost categories than in the failure cost cate¬ gories?

c. Which cost categoiy is the most likely target for spending reductions? Explain.

d. How would the adoption of a TQM philosophy affect the focus in re¬ ducing quality costs? LO.1

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Prevention costs Appraisal costs Internal failure costs External failure costs. Total quality costs $ 6,000,000 3,000,000 3,000,000 2,000,000 $14,000,000