Advanced Technologies (AT) produces two compression machines that are popular with manufacturers of plastics: no. 165 and no. 172. Machine no. 165 has an average selling price of $29,100, whereas no. 172 typically sells for approximately $25,700. The company is very concerned about quality and has provided the following information:

	No. 165			No. 172
Number of machines produced and sold		120			110
Warranty costs:
Average repair cost per unit	$	810		$	300
Percentage of units needing repair		75	%		10	%
Reliability engineering at $100 per hour		1,510	hours		1,950	hours
Rework at AT's manufacturing plant:
Average rework cost per unit	$	1,855		$	1,550
Percentage of units needing rework		25	%		30	%
Manufacturing inspection at $40 per hour		210	hours		410	hours
Transportation costs to customer sites to fix problems	$	28,600		$	13,200
Quality training for employees	$	33,200		$	49,100

Required:

1. 1. Classify the preceding costs as prevention, appraisal, internal failure, or external failure.

2. 2-a. Using the classifications in requirement (1), compute AT's quality costs for machine no. 165 in dollars and as a percentage of sales revenues.

3. 2-b. Using the classifications in requirement (1), compute AT's calculate prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs.

4. 3-a. Using the classifications in requirement (1), compute AT's quality costs for machine no. 172 in dollars and as a percentage of sales revenues.

5. 3-b. Using the classifications in requirement (1), compute AT's calculate prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs.

6. 4. Is the company "investing its quality expenditures differently for the two machines.