(Note: Please help with section 1 & 3

In 20X1, Don Blackburn, president of Price Electronics, received a report indicating that quality costs were 31% of sales. Faced with increasing pressures from imported goods, Don resolved to take measures to improve the overall quality of the companys products. After hiring a consultant in 20X1, the company began an aggressive program of total quality control. At the end of 20X5, Don requested an analysis of the progress the company had made in reducing and controlling quality costs. The accounting department assembled the following data:

Sales			Prevention			Appraisal			Internal Failure			External Failure
20X1		$1,000,000			$10,000			$20,000		$160,000			$120,000
20X2		1,200,000			50,000			30,000		120,000			100,000
20X3		1,400,000			70,000			60,000		70,000			50,000
20X4		1,200,000			80,000			30,000		50,000			40,000
20X5		1,000,000			100,000			10,000		24,000			16,000

Required:

1. Compute the quality costs as a percentage of sales by category, and in total for each year. Round your answers to two decimal places.

2. Prepare a multiple-year trend graph for quality costs, both by total costs and by category in your own paper. Using the graph, assess the progress made in reducing and controlling quality costs. Does the graph provide evidence that quality has improved?

Quality costs overall have decreased. Real evidence of this change stems from the fact that internal and external failure costs have decreased the most.

3. Using the 20X1 quality cost relationships (assume all costs are variable), calculate the quality costs that would have prevailed in 20X4.

Prevention

Appraisal

Internal Failure

External Failure

Total

20X4

$_______

$_______

$_______

$_______

$_______

20X5

_______

_______

_______

_______

_______