Keaton manufactures high-quality speakers. Suppose Keaton is considering spending the Following amounts oil a new quality program:

Keaton expects this quality program to save costs, as follows:

It also expects this program to avoid lost profits from:

Requirements 

1. Classify each of these costs into one of the four categories of quality costs (prevention, appraisal, internal failure, external failure).

2. Should Keaton implement the quality program? Give your reasons.

Transcribed Image Text:

Additional 20 minutes of testing for each speaker Negotiating with and training suppliers to obtain higher-quality materials and on-time delivery Redesigning the speakers to make them easier to manufacture $ 600,000 400,000 1,400,000