Crowder Manufacturing Company manufactures and sells ceiling fans. Crowder incurred the following costs related to quality for the year: Cost of warranty $35,000 Cost of employee quality training $27,000 Cost incurred to rework fans $18,000 Spoilage cost (net) $15,000 Cost of handling customer complaints $11,000 Depreciation cost of test equipment $ 6,000 Cost of quality circles $ 5,000 Maintenance cost of test equipment $ 3,000 Cost of retesting reworked fans $ 2,000 Cost of final testing of fans $ 1,000 Required:

a) Prepare a list of the costs, which are related to controlling quality and determine the total dollar amount of these costs.

b) Prepare a list of the costs, which are related to failing to control quality and determine the total dollar amount of these costs.

c) Explain why you might want to incur higher costs for controlling quality.