10-53

Year 1 Year 2 $3,500,000 $3.800,000 $ Sales revenue Costs Redesign process. Discard defective units. Training on equipment Warranty claims Contract cancellations Rework Preventive maintenance Product liability claims Final inspection. $ 29,000 37.000 250,000 129.000 201.000 72,000 114.000 302.000 190,000 37,000 43,000 210,000 176,000 154,000 96,000 152.000 176,000 198,000 h. Required a. Classify these items into prevention (P), appraisal (A), internal failure (IF), or external failure (EF) costs Calculate the ratio of the prevention, appraisal, internal failure, and external failure costs to sales for year 1 and year 2 10-53, Trading-Off Costs of Quality Using the costs calculated in Exercise 10-52, construct a cost of quality report for year 1 and year 2. (LO 10-7.8)