Case 7-57 from Management Accounting 6th edition

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Case 7-57 from Management Accounting 6th edition (Atkinson, Kaplan, Matsumura, Young)

A. Which costs are relevant to Polley’s decision to choose either option 1 or option 2?
B. What qualitative factors is Polley likely to consider in choosing either option 1 or option 2?
C. Explain how the cost-of-quality framework of prevention, appraisal, internal failure, andexternal failure might be applied to operations with environmental pollution, where failures aredefined as accidental spillage or leakage of hazardous wastes or as illegal levels of pollutants. Onwhich of the four cost-of-quality categories would you advise Polley to focus her attention?

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