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NEW QUESTION: 1
In Year 2, a manufacturing company instituted a total quality management (TQM) program producing the following report:

On the basis of this report, which one of the following statements is most likely true?
A. Quality costs, such as returns and repairs under warranty, decreased by 40%.
B. An increase in inspection costs was solely responsible for the decrease in quality costs.
C. An increase in prevention and appraisal costs resulted in a higher quality product and therefore resulted in a decrease in failure costs.
D. Quality costs, such as scrap and rework, decreased by 48%.
Answer: C
Explanation:
Prevention and appraisal costs increased substantially, but internal and external failure costs decreased. Thus, the soundest conclusion is that the increase in prevention and appraisal costs resulted in a higher-quality product.

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