Based on company practices and costs of poor quality (COPQ) models formulated by others, an activity-based costing program is introduced in this article to identify the opportunities to develop and implement appropriate improvement projects to reduce the costs of poor quality and increase the quality of products and services. This program consists of three phases: determining the COPQ, initiating improvement projects, and evaluating the improvement projects. These three phases, in turn, involve 12 steps. The purpose of these steps, along with the techniques used in each step to accomplish the required activities, is explained in this article. Also, a case study of an analog integrated circuit test operation is used to apply the proposed program in identifying the opportunities and initiating appropriate improvement projects to reduce the costs of poor quality. The results of the case study show that the program can be applied to benefit the companies in reducing the costs of poor quality and, hence, increasing the quality of processes, products, and services. Also, the proposed program can be used to assess the need for further improvement projects