Company A uses an activity based management approach, which means that it uses activity-based costing (ABC) to determine cost categories. It maps financial categories into activity costs, and activities performed at cost centers are rolled up to aggregate quality costs and percentages. In this way, the company obtains exact information about every category: prevention costs, appraisal costs, as well as internal and external failure costs. An example of activity costs is given in Table I, and the resulting CoQ chart is shown in Figure 1.