Adolphson Corporation has provided the following summary of its quality cost report for the last two years:
|
Summary of Quality Cost Report (in thousands) |
|
|
||
|
|
This Year |
Last Year |
% Change |
|
|
Prevention costs |
$ 300 |
$ 200 |
+50 |
|
|
Appraisal costs |
315 |
210 |
+50 |
|
|
Internal failure costs |
114 |
190 |
-40 |
|
|
External failure costs |
621 |
1,200 |
-48 |
|
|
Total quality costs |
$1,350 |
$1,800 |
-25 |
|
On the basis of this report, which one of the following statements is most likely
correct?
A) An increase in prevention and appraisal costs resulted in fewer defects, and
therefore, resulted in a decrease in internal and external failure costs.
B) A decrease in internal and external failure costs resulted in less need for
prevention and appraisal costs.
C) Quality costs such as scrap and rework decreased by 48%.
D) Quality costs such as returns and repairs under warranty decreased by 40%.