When the quality costs for Year 3 were ready, John was disappointed with the outcome. The total quality costs have increased in Year 2 and finally, in Year 3 the company was back to square zero, spending $ 2,700 in quality costs. Paul was supportive of Ringo's decisions and argued that quality is a long-term investment as it takes time to reap its benefits. Required

a) Explain John and Paul's differing points of view of quality costs. (6 marks)

b) Explain what is expected to happen in Year 4 if (i) Fridges-R-Fun keeps following Ringo's decision and if (ii) Fridges-R-Fun cancels the activities Ringo has implemented. (6 marks)

Considering the industry benchmark for the overhead for assembly is 75% of direct labour cost, identify whether this specific job has an overhead for assembly lower or higher than a job using the industry benchmark. Briefly explain what could cause a difference between this specific job and the industry benchmark for the assembly overhead cost. (6 marks)