Question

Christianson Corp. manufactures radiation-shielding glass panels. (Click the icon to view the information.) Click the con Requirements 1. Classify each item as a prevention cost, an appraisal cost an internal failure cost, or an external failure cost. 2. Should Christianson implement the new quality program? Give your reason internal fallure cost, Requirement 1. Classify each item as a prevention cost, an appraisal cost, an internal failure cost or an external failure cost Type of Quality Cost Strength testing one item from each batch of panels CA S A Training employees in TQM Training suppliers in TQM Identifying preferred suppliers who commit to on-time delivery of perfect quality materials Avoid lost profits from lost sales due to disappointed customers B A void rework and spoilage Avoid inspection of raw materials Avoid warranty costs Requirement 2. Should Christianson implement the new quality program? Give your reason Christianson implement the new quality program. The program would ENN the companys XD Data Table 60,000 21.000 37,000 Suppose Christianson is considering spending the following amounts on a new TOM program: Strength-testing one item from each batch of panels Training employees in TOM . Training suppliers in TQM..... Identifying preferred suppliers that commit to on-time delivery of perfect quality materials. Christians on expects the new program to save costs through the following: Avoid lost profits from lost sales due to disappointed customers.....s Avoid rework and spoilage ........ Avoid inspection of raw materials ..... Avoid warranty costs...... 95,000 67.000 56,000 17.000

Answer 1

Part 1

Strength-testing one item from each batch of panels	Appraisal
Training employees in TQM	Prevention
Training suppliers in TQM	Prevention
Identifying suppliers who commit to on-time delivery of perfect-quality materials	Prevention
Avoid lost profits from lost sales due to disappointed customers	External Failure
Avoid rework and spoilage	Internal Failure
Avoid inspection of raw materials	Appraisal
Avoid warranty costs	External Failure

Part 2

Christianson should implement the new TQM program. The program would save the company $53,000

Because the total cost of undertaking the new TQM program ($172,000) is less than the total cost of not undertaking the new TQM program ($225,000) by $53,000.

Undertake the New TQM Program

Prevention
Training employees in TQM	21000
Training suppliers in TQM	37000
Identifying suppliers who commit to on-time delivery of perfect-quality materials	54000
Total prevention costs	112000
Appraisal
Strength-testing one item from each batch of panels	60000
Total appraisal costs	60000
Total costs of undertaking the new TQM program	$172000

Do Not Undertake the New TQM Program

Appraisal
Avoid inspection of raw materials	56000
Total appraisal costs	56000
Internal Failure
Avoid rework and spoilage	67000
Total internal failure costs	67000
External Failure
Avoid lost profits from lost sales due to disappointed customers	95000
Avoid warranty costs	17000
Total external failure costs	102000
Total costs of not undertaking the new TQM program	$225000