Crowder Manufacturing Company manufactures and sells ceiling fans. Crowder incurred the following costs related to quality for the year:
- Cost of warranty $35,000
- Cost of employee quality training $27,000
- Cost incurred to rework fans $18,000
- Spoilage cost (net) $15,000
- Cost of handling customer complaints $11,000
- Depreciation cost of test equipment $ 6,000
- Cost of quality circles $ 5,000
- Maintenance cost of test equipment $ 3,000
- Cost of retesting reworked fans $ 2,000
- Cost of final testing of fans $ 1,000
- list of the costs, which are related to controlling quality and determine the total dollar amount of these costs.
- list of the costs, which are related to failing to control quality and determine the total dollar amount of these costs.
- Explain why you might want to incur higher costs for controlling quality.