‘Answer for a) - i) i) andi is given in columnar format a) Ace Limited Cost of Quality Report Forthe Year Ended September 30, 2019 - Percentage of [Percentage Quality [Total quality eet qualty | of Total Costs Cost costs sales Prevention costs: Technical support to suppliers of materials] $6,000 Product design reviews $12,000 Employee quality training $35,000 [Total prevention costs $53,000} 38.7% 5.5% — [$53,000/$950,000 [Appraisal costs: Finished goods inspections $25,000 Quality testing $5,000] [Total appraisal costs $30,000] 21.9% 2.2% — {$30,000/$950,000 Internal failure costs: Rework $3,000 Serap $15,000 [Total internal failure costs $24,000] 17.5% 2.5% — [$24,000/$990,000 External failure costs: Customer quality complaints $20,000| Returned goods $10,000} [Total external failure costs $30,000] 21.9% 3.2% _ |$30,000/$950,000 [Total quality costs $137,000] 100.0% | 144% b) Benefit ofcost of quality report: The Cost of quality report helps in analyzing the cost of quality component wise and controlling the costs ‘The cost of conformance (prevention end appraisal) andinon conformance (internal and external fllure) are inversely related ‘firm should spend higher amount on quality conformance costs thats preventive and appraisal costs so that the cost of internal fllure and external fllure will be reduced Inthe long run a spend on preventive and appraisal costs is justified due to lower quality costs incurred on internal falure and external fallure