In response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the quality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amount of warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and quality control over the last two years are given below:

Revenue has been flat over the past few years, at £75,000,000 per year. A great deal of money has been spent in the effort to upgrade quality, and management is anxious to see whether or not the effort has paid off.

Required
1. Prepare a quality cost report that contains data for both this year and last year. Carry percentage computations to two decimal places.
2. Prepare a bar graph showing the distribution of the various quality costs by category.
3. Prepare a written evaluation to accompany the reports you have prepared in Requirements 1 and 2 above. This evaluation should discuss the distribution of quality costs in the company, changes in this distribution that you see taking place, the reasons for changes in costs in the various categories, and any other information that would be of value to management.

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Inspection Quality engineering Depreciation of test equipment Rework labour Statistical process control Cost of field servicing This year £900,000 570,000 240,000 1,500,000 180,000 900,000 Last year £750,000 420,000 210,000 1,050,000 1,200,000