Clason corp. manufactures radiation- shielding glass panels. Suppose Clason is considering spending the following amounts on a

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

Strength- testing one item from each batch of panels.......................... $ 62,000
Training employees in TQM.....................................................................  $ 23,000
Training suppliers in TQM........................................................................  $ 34,000
Identifying preferred suppliers that commit to
ontime delivery of perfect quality materials.............................................$ 51,000

Clason expectsthe new program to save costs through the following:
Avoid lostprofits from lost sales due to disappointed customers............... $ 85,000
Avoid rework and spoilage................................................................................ $ 66,000
Avoid inspection of raw materials......................................................................$ 49,000
Avoid warranty costs.......................................................................................... $ 25,000

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

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

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Related Book For  book-img-for-question

Managerial Accounting

ISBN: 978-0133428377

4th edition

Authors: Karen W. Braun, Wendy M. Tietz

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