(L.OBJ. 4) Classifying quality costs and using these costs to make decisions [15—20 min]...

(L.OBJ. 4) Classifying quality costs and using these costs to make decisions [15—20 min]

Cleary, Inc., manufactures door panels. Suppose Cleary is considering spending the following amounts on a new total quality management (TQM) program:

Requirements

1. Classify each cost as a prevention cost, an appraisal cost, an internal failure cost, or an external failure cost.

2. Should Cleary implement the new quality program? Give your reason.