MICHIGAN CORPORATION   ……

MICHIGAN CORPORATION

……. reported sales of $8,100,000 in 2016.  At the end of the year, the following quality costs were reported:

Design review                     $405,000

Lost sales                              270,000

Material inspection                    54,000

Process acceptance                  67,500

Product inspection                     40,500

Quility traning                           135,000

Recalls                                      135,000

Reinspection                                67,500

Returned goods                          128,250

Scrap                                             47,250

Required:

1. What are quality costs?
2. Describe the four types of quality costs.  Which is the most significant and important to control and why?
3. Prepare a quality cost report for 2016
4. Prepare a graph (either a pie chart or bar graph) that illustrates the relative distribution of quality costs and comment on the distributio