Question:
(Quality costs) The accounting system for Amaldi Co. reflected the following quality costs for 2009 and 2010:
|
2009
|
2010
|
|
Customer refunds for poor product quality
|
$24,000
|
$18,000
|
|
Fitting machines for mistake-proof operations
|
9,400
|
13,800
|
|
Supply chain management activities
|
8,000
|
10,000
|
|
Waste disposal
|
44,000
|
36,000
|
|
Quality training
|
28,000
|
30,000
|
|
Litigation claims for product defects
|
72,000
|
56,000
|
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.
c. Discuss the pattern of the changes in the two categories.