Walton Company has measured its quality costs for the past two years. After the company gathers its quality cost data, it summarizes those costs using the four categories shown below:

Required:

1. Calculate the total cost of quality last year and this year.

2. For last year, calculate the cost in each of the four categories as a percent of the total cost of quality.

3. For this year, calculate the cost in each of the four categories as a percent of the total cost of quality.

4. Discuss the company’s efforts to manage its costs of quality over the two-year period. Is performance trending in a favorable or unfavorable direction? Why?

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Last Year This Year $357,000 $650,000 $445,000 $545,000 $790,000 $1,100,000 Prevention costs Appraisal costs Internal failure costs $500,000 $680,000 External failure costs.