The Hartono Corporation manufactures and sells industrial grinders. The following table presents financial information pertaining to quality in 2013 and 2012 (in thousands):

REQUIRED
1. Classify the cost items in the table into prevention, appraisal, internal failure, or external failure categories.
2. Calculate the ratio of each COQ category to sales in 2012 and 2013. Comment on the trends in costs of quality between 2012 and 2013.
3. Give two examples of nonfinancial quality measures that Hartono Corporation could monitor as part of a total quality-control effort.

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2012 2013 Sales Line inspection Scrap Design engineering Cost of returned goods Product-testing equipment Customer support Rework costs Preventive equipment inspection Product liability claims Incoming materials inspection Breakdown maintenance Product-testing labour Training Warranty repair Supplier evaluations S10,000 110 250 100 60 50 40 160 35 200 20 90 220 45 300 20 $12,500 85 175 240 145 50 30 135 90 100 40 40 75 120 200 50