REPORTING QUALITY COSTS A quality cost reporting system is essential to an organization about improving and controlling quality costs. The first and simplest step :ling such a system is assessing current actual quality costs. A detailed listing o(a quality costs by cate-gory can provide two important insights. First, it reveals the magnitude of the quality costs in each category, allowing managers to assess their financial impact. Second. it shows the distribution of quality costs b cafe o allowing managers to assess the relative importance of each category. 11/6111111111 illustrates a quality cost report for Chesser Company.