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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

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 (COQ) in 2019 and 2020 (in thousands of dollars):

2019 2020
Sales $ 16,500 $ 20,500
Materials inspection 350 65
In-process (production) inspection 165 130
Finished product inspection 300 75
Preventive equipment maintenance 25 65
Scrap (net) 550 350
Warranty repairs 750 500
Product design engineering 155 320
Vendor certification 15 65
Direct costs of returned goods 325 85
Training of factory workers 45 145
Product testingequipment maintenance 65 65
Product testing labor 260 95
Field repairs 75 45
Rework before shipment 290 205
Product-liability settlement 410 65
Emergency repair and maintenance 250 80

QUESTIONS:

1. Classify the cost items in the table into cost-of-quality (COQ) categories. Calculate the ratio of each COQ category to revenues in each of the 2 years.

2019 2020
Amount % of Sales Amount % of Sales

Cost of quality:

Prevention costs:

Total prevention costs

$0 % $0 %

Appraisal costs:

Total appraisal costs $0 % $0 %

Internal failure costs:

Total internal failure costs $0 % $0 %

External failure costs:

Total external failure costs $0 % $0 %
Total cost of quality (COQ) $0 % $0 %

2. Calculate the percentage change in each COQ category and total COQ and comment on the results:

3a. Percentage change in total COQ as a percentage of sales, from 2019 to 2020 % increase/decrease
3b. Total COQ in 2020 expressed as a percentage of 2019 sales dollars %
3c. Percentage change in total prevention costs, 2019 to 2020 ____ %
3d. Percentage change in total appraisal costs, 2019 to 2020 %
3e. Percentage change in total internal failure costs, 2019 to 2020 %
3f. Percentage change in total external failure costs, 2019 to 2020 %

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