A company has developed a list of quality-related costs as follows: $\begin{array}{lrr}& \text { Year 1 } & \text { Year 2 } \
\text { Supplier evaluation } & \$ 0 & \$ 70,000 \
\text { Quality training } & 10,000 & 50,000 \
\text { Inspection of finished product } & 75,000 & 60,000 \
\text { Rework } & 50,000 & 40,000 \
\text { Warranty work } & 120,000 & 80,000 \
\text { Sales } & \$ 2,000,000 & \$ 2,000,000
\end{array}$ The company's controller is pleased with the Year 2 results and commented that the company is now on its way toward total quality.Is the controller right? Explain.

Question

A company has developed a list of quality-related costs as follows: $\begin{array}{lrr}& \text { Year 1 } &  \text { Year 2 } \
\text { Supplier evaluation } & \$  0 & \$  70,000 \
\text { Quality training } & 10,000 & 50,000 \
\text { Inspection of finished product } & 75,000 & 60,000 \
\text { Rework } & 50,000 & 40,000 \
\text { Warranty work } & 120,000 & 80,000 \
\text { Sales } & \$ 2,000,000 & \$ 2,000,000
\end{array}$ The company's controller is pleased with the Year 2 results and commented that the company is now on its way toward total quality.Is the controller right? Explain.

Quizplus · Accepted Answer

The Answer of A company has developed a list of quality-related costs as follows: $\begin{array}{lrr}& \text { Year 1 } &  \text { Year 2 } \
\text { Supplier evaluation } & \$  0 & \$  70,000 \
\text { Quality training } & 10,000 & 50,000 \
\text { Inspection of finished product } & 75,000 & 60,000 \
\text { Rework } & 50,000 & 40,000 \
\text { Warranty work } & 120,000 & 80,000 \
\text { Sales } & \$ 2,000,000 & \$ 2,000,000
\end{array}$ The company's controller is pleased with the Year 2 results and commented that the company is now on its way toward total quality.Is the controller right? Explain.

A Company Has Developed a List of Quality-Related Costs as Follows