Ross Company implemented a quality improvement program and tracked the following for the five years:

By cost category as a percentage of sales for the same period of time:

Required:
1. Prepare a bar graph that reveals the trend in quality cost as a percentage of sales (time on the horizontal axis and percentages on the vertical). Comment on the message of the graph.
2. Prepare a bar graph for each cost category as a percentage of sales. What does this graph tell you?
3. What if management would like to have the trend in relative distribution of quality costs? Express this as a bar graph and comment on its significance.

Transcribed Image Text:

Quality Costs Actual Sales 2011 2012 2013 2014 2015 S500,000 495,000 450,000 434,000 400,000 $2,000,000 2,200,000 2,400,000 2,480,000 3,200,000 Costs as a Percentage of Sales 25.00% 22.50 18.75 17.50 12.50 Prevention Appraisal Internal Fail External Failure 2.50% 2.50% 7.50% 12.50% 7 1 3