This study examined the relationships between expenditures on prevention and appraisal activities and failure costs by using monthly quality costs data from a plant of a large electronic company. The results indicated that from 1992 to 1994, the plant could improve failure costs with no incremental investment in prevention and appraisal activities as TQM model assumed. But the results also showed that after 1995 investment in prevention and appraisal activities and failure costs increased simultaneously or were trade-off.