JMM is a car manufacturer. It is a relatively new company and the directors are keen to establish a reputation for high quality. The management of JMM recognizes the need to establish a culture of Total Quality Management (TQM) at the company.
The management accounting team at JMM has collected the following actual information for the most recent quarter of the current year:
Cost data

.....................................................................................$
Customer support centre cost per hour .............58
Equipment testing cost per hour ..........................30
Manufacturing rework cost per car ....................380
Warranty repair cost per car .............................2600

Volume and activity data

Cars requiring manufacturing rework ..............800 cars
Cars requiring warranty repair ..........................650 cars
Customer support centre time ..........................500 hours
Production line equipment testing time ...........400 hours

Additional information
JMM undertook a quality review of its existing suppliers during the quarter at a cost of $60 000.
Due to the quality issues in the quarter, the car production line experienced periods of unproductive ‘down time’ which cost $375 000.

Required:
(a) Produce a Cost of Quality report for JMM using the four recognized quality cost headings.
(b) Explain how a Cost of Quality report would support the development of a TQM culture at JMM.