Backwoods American, Inc., produces expensive water-repellent,down-lined parkas. The co. implemented a TQM program in 2005.Following are the quality-related accounting data that have beenaccumulated for the 5-year period after the program's start.

			Year
	2006	2007	2008	2009	2010
Quality Costs ($1000s)
Prevention	3.2	10.7	28.3	42.6	50
Appraisal	26.3	29.2	30.6	24.1	19.6
Internal Failure	39.1	51.3	48.4	35.9	32.1
External Failure	118.6	110.5	105.2	91.3	65.2
Accounting Measures ($1000s)
Sales	2700.6	2690.1	2705.2	2310.2	2880.7
Manufacturing Cost	420.9	423.4	424.7	436.1	435.5

• Compute the co's total failure costs ratios (=(InternalFailure + External Failure)/(TQC) x 100%) as a % of TQCfor each of the 5 years. Does there appear to be a trend? Whatmight be the cause?
• Compute prevention costs (prevention/TQC x 100%) and appraisalcost (appriasal/TQC x 100%), each as a % of TC, during each of the5 years. What do you guess is the co's quality strategy (e.g.,emphasis on being proactive or reactive)?
• Compute quality-sales indices (TQC/Sales) and quality-costindices (TQC/MfrCost) for each of the 5 years. Can one assess theeffectiveness of the co's quality management program from theseindices (i.e., are these indices good indicators ofeffectiveness)?
• List some examples of each quality-related costs - i.e., ofprevention, appraisal, and internal and external failure costs -that might result from the production of the parkas.
• The BA Inc produces 20,000 parkas annually. The qualitymanagement program implemented improved average percentage of goodparkas produced by 2% each year beginning with 83% good qualityparkas in 2005. Only 20% of poor quality parkas can be reworked(and made good). Compute the product yield for each of the 5years.
• Assuming a rework cost of $12/parka, determine themanufacturing cost per good parka for each of the 5 years. What dothese results imply about the co's quality management program?