Quality costing: balancing category costs Managers concerned with improving quality sometimes have a difficult balancing act, given the four types of quality costs they have to manage. As a new manager, you are trying to figure out a strategy for managing $2 million of quality costs; your total quality costs cannot exceed 4% of sales.
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You need to decide how much should go into each of the four quality-cost categories. How would you go about allocating these costs? What trade-offs would you have to make as you allocate the costs?