Christianson Corp. manufactures radiation- shielding glass panels. Suppose the company is considering spending the following amounts on a new TQM program:

Strength- testingone item from each batch of panels.......................... $ 68,000

Training employees in TQM................................................................ $ 24,000

Training suppliers in TQM.................................................................... $ 33,000

Identifying preferred suppliers that commit

to on- time delivery of perfect quality materials................................ $ 55,000

The company expects the new program would save costs through the following:

Avoid lost profits from lost sales due to disappointed customers.............................. $ 95,000

Avoid rework and spoilage.......................................................................................... $ 67,000

Avoid inspection of raw materials................................................................................ $ 50,000

Avoid warranty costs.................................................................................................... $ 19,000

Requirements

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

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