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Quality costs The accounting system for Dolment Co. reflected the following quality costs for Year 1 and Year 2: Year 1 Year 2 Customer refunds
Quality costs The accounting system for Dolment Co. reflected the following quality costs for Year 1 and Year 2: Year 1 Year 2 Customer refunds for poor product quality $37,000 $29,000 Fitting machines for mistake-proof operations 9,400 11,800 Supply chain management activities 9,000 10,000 Waste disposal 44,000 36,000 Quality training 26,000 30,000 Litigation claims for product defects 81,000 64,000 a. Which of these are costs of compliance, and which are costs of noncompliance? b. Calculate the percentage change in each cost and for each category. Note: Round each percentage change to the nearest whole percentage. Note: Indicate a decrease with a negative sign. Year 1 Year 2 Percentage Change Customer refunds for poor product quality Noncompliance cost $37,000 $29,000 (7) % X Fitting machines for mistake-proof operations Compliance cost 9,400 11,800 (49) % * Supply chain management activities Compliance cost 9,000 10,000 32 % x Waste disposal Noncompliance cost 44,000 36,000 3 % x Quality training Compliance cost 26,000 30,000 37 % Litigation claims for product defects Noncompliance cost 81,000 64,000 6 % x Compliance cost category 39 % X Noncompliance cost category (5) % *
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