100 P16.46 Quality costs analysis: manufacturer L016.8 Lightning Technologies Ltd (LTL) produces two extrusion machines that are very popular with plastics manufacturers: model ABC and model XYZ. Model ABC has an average selling price of $45000, and model XYZ sells for about $40500. The company is concerned about the differing performance of the two machines In relation to quality, and has collected the following information: Model ABC Model XYZ No. of machines (units) produced and sold 80 Warranty costs: Average repair cost per unit S1800 5600 Percentage of units needing repairs 70% 105 Reliability engineering at $225 per hour 1600 hours 2.000 hours Rework at LTL's manufacturing plant Average rework cost per unit reworked $2850 $2.400 Percentage of units needing rework 35% Manufacturing inspection at 575 per home 300 hours SOO hours Transportation costs to customer sites to fix problems $44250 $22 500 Quality training for employees S52 500 $75000 Required: 1. Classify the above quality costs as prevention, appraisal, Internal failure or external fallure. 2. Prepare e cost of quality report in dollars for model ABC, using a similar format to Exhibit 16.11. In addition, add a further column showing all quality costs as a percentage of sales revenue. 3. Prepare a similar cost of quality report for model XYZ. 4. Comment on the two reports, noting whether the company is investing its quality expenditure differently for the two machines 25%