To evaluate its performance, the Blankie Co. is comparing its costs of quality from one year to the next. The relevant costs are as follows: | First Year
| Second Year
|
|---|
Prevention | $ 45,000 | $ 60,000 | Appraisal | 25,000 | 35,000 | Internal failure | 80,000 | 50,000 | External failure | 75,000 | 65,000 |
Which of the following conclusions can Blankie draw about its quality program?
|
a. | It has been a success, because conformance costs decreased by $40,000 and nonconformance costs increased by $25,000. | |
b. | It has been a success, because conformance costs increased by $25,000 while nonconformance costs decreased by $40,000. | |
c. | It has been a failure, because conformance costs increased by $25,000 while nonconformance costs decreased by $40,000. | |
d. | It has been a failure, because conformance costs decreased by $40,000 while nonconformance costs increased by $25,000. |
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