Terry Taylor's quality improvement program includes a pareto analysis each period to identify key quality cost components for management attention and action. For the past accounting period, Taylor's records show the following internal failure costs:

{Required:}
1. Prepare a pareto analysis of internal failure costs and identify the main contributor of the internal failure costs in the company.
2. Prepare a pareto analysis of rework costs and identify the key contributor of the rework costs in the company.

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Rework costs.. Scrap costs........ $20,000 15,000 Down Grading Costs........... 12,000 Retesting costs..... 10,000