Interim Quality Performance Report Davis, Inc., had the following quality costs for the years ended December 31, 20x4 and 20x5: 20x4 Prevention costs: Quality audits Vendor certification Appraisal costs: Product acceptance Process acceptance Internal failure costs: Retesting Rework External failure costs: Recalls Warranty $70,000 115,500 $84,000 95,000 $92,000 200,000 $140,000 340,000 20x5 $105,000 173,250 $126,000 100,000 $90,000 170,000 $112,000 290,000 At the end of 20x4, management decided to increase its investment in control costs by 50 percent for each category's items with the expectation that failure costs would decrease by 20 percent for each item of the failure categories. Sales were $11,000,000 for both 20x4 and 20x5. Required: 1. Calculate the budgeted costs for 20x5. $ Prepare an interim quality performance report. Enter all answers as positive amounts. If there is no variance enter "0" for your answer. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table, select "Favorable" if it is favorable, or No effect if there is no change. Round percentage answers to two decimal places. For example, 5.789% wou be entered as "5.79". Prevention costs: Total prevention costs Appraisal costs: Total appraisal costs Davis, Inc. Interim Standard Performance Report: Quality Costs For the Year Ended December 31, 20x5 Budgeted Costs Variance Actual Costs $ $ Unfavorable, Favorable or No effect Internal failure costs: Total internal failure costs External failure costs: Total external failure costs. Total quality costs Percentage of sales $ % 1000 2. What can be inferred from the report regarding the progress Davis has made? 3. What if sales were $11,000,000 for 20x4 and $13,750,000 for 20x5? What adjustment to budgeted rework costs would be made? (Note: Quality auditing is a discretionary cost and its budget is not affected by the change sales revenue in 20x5.) New total budgeted rework costs: