Problem - Cost Accounting (Cost of Quality)
Sheila's Sandal Works has gathered the following data on its quality costs for 2002 and 2003:
Defect prevention costs 2002 2003
Quality rating $9,000 $10,500
Quality Technology $7,500 $10,000
Quality production design $4,000 $9,000
External failure costs 2002 2003
Warranty Handling $15,000 $10,000
Customer Reimbursements $11,000 $7,200
Customer Returns Handling $7,000 $4,000
1. Compute the percentage change in the two quality cost categories from 2002 to 2003.
2. White a brief explanation of the pattern of change in the two categories.