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 $29,800, whereas no. 172 typically sells for approximately $27,300. The company is very concerned about quality and has provided the following information:

No. 165

No. 172

Number of machines produced and sold

140

190

Warranty costs:

Average repair cost per unit

$890

$330

Percentage of units needing repair

70

%

10%

Reliability engineering at $130 per hour

1,590

hours

1,990

hours

Rework at AT's manufacturing plant:

Average rework cost per unit

$

1,880

$1,590

Percentage of units needing rework

40%

25%

Manufacturing inspection at $60 per hour

290

hours

490 hours

Transportation costs to customer sites to fix problems

$

29,300

$14,600

Quality training for employees

$34,600

$49,600

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.

Using the classifications in requirement (1), compute AT's quality costs for machine no. 165 in dollars and as a percentage of sales revenues. (Round "Percentage of Sales" to 2 decimal places.)

No. 165

	Dollars	Percentage of Sales
Sales Revenue
Prevention Cost:
Reliability Engineering
Quality Training
Total
Appraisal Cost:
Internal failure cost:
External failure cost:
Warranty Costs
Transportation costs to customer sites
Total
Total Quality Costs

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.

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. (Round "Percentage of Total Quality Costs" to 2 decimal places. Total may not be equal to 100% due to rounding.)

No. 165

	Dollars	Percentage of Total Quality Costs
Prevention
Appraisal
Internal Failure
External Failure
Total