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Learning Objective 6 E19-31 Classifying quality costs and using these costs to make decisions Clason, Inc. manufactures door panels. Suppose Clason is considering spending the
Learning Objective 6 E19-31 Classifying quality costs and using these costs to make decisions Clason, Inc. manufactures door panels. Suppose Clason is considering spending the following amounts on a new total quality management (TQM) program: 2. Total cost to undertake $192,000 Strength-testing one item from each batch of panels Training employees in TOM Training suppliers in TOM Identifying suppliers who commit to on-time delivery of perfect quality materials $ 68,000 27,000 39,000 58,000 Clason expects the new program would save costs through the following: Avoid lost profits from lost sales due to disappointed customers Avoid rework and spoilage Avoid inspection of raw materials Avoid warranty costs $ 86,000 63,000 57,000 15,000 Requirements 1. Classify each cost as a prevention cost, an appraisal cost, an internal failure cost, or an external failure cost. 2. Should Clason implement the new quality program? Give your reason
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