Question:
MULTIPLE-YEAR TREND REPORTS
The controller of Willson Company has computed quality costs as a percentage of sales for the past five years (2004 was the first year the company implemented a qualityimprovement program). This information is as follows:
|
|
Prevention
|
Appraisal
|
Internal Failure
|
External Failure
|
Total
|
|
2003
|
2%
|
3%
|
8.0%
|
12%
|
25.0%
|
|
2004
|
3
|
4
|
7.0
|
10
|
24.0
|
|
2005
|
4
|
5
|
5.5
|
6
|
20.5
|
|
2006
|
5
|
4
|
3.0
|
5
|
17.0
|
|
2007
|
6
|
3
|
1.0
|
2
|
12.0
|
Required:
1. Prepare a trend graph for total quality costs. Comment on what the graph has to say about the success of the quality improvement program.
2. Prepare a graph that shows the trend for each quality cost category. What does the graph have to say about the success of the quality improvement program? Does this graph supply more insight than the total cost trend graph does?
3. Prepare a graph that compares the trend in relative quality costs. What does this graph tell you?