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 $60,000, whereas no. 172 typically sells for approximately $55,000. The company is very concerned about quality and has provided the following information: No. 165 No. 172 Number of machines produced and sold 80 TO Warranty costs: Average repair cost per unit $1,200 $400 Percentage of units needing repair 70% 10% Reliability engineering at $150 per hour 1,600 hours 2,000 hours Rework at AT's manufacturing plant: Average rework cost per unit $1,900 $1,600 Percentage of units needing rework 35% 25% Manufacturing inspection at $50 per hour 300 hours 500 hours Transportation costs to customer sites to fix problems $29,500 $15,000 Quality training for employees $35,000 $50,000 Requirements: 2. Using the classifications in requirement (1), compute AT's quality costs for machine no. 165 in dollars and as a percentage of sales revenues. Also calculate prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs. SHOW FORMULAS Dollars % of Sales Quality Training for Employees $35,000 Reliability Engineering 240000 Total Prevention Costs $275,000 Manufacturing Inspection $15,000 Total Appraisal Costs $15,000 Rework $53,200 Total Internal Failure Costs $53,200 Warranty Costs $67,200 Transportation to Customers $29,500 Total External Failure Costs $96,700 Total Quality Costs $439,900 3. Repeat requirement (2) for machine no. 172. SHOW FORMULAS Cost % of costs Quality Training $50,000 Reliability Engineering 300000 Total Prevention Costs $350,000 Manufacturing Inspection 25000 Total appraisal cost 25000 Rework $40,000 Total Internal Failure Costs $40,000 Warranty Cost $4,000 Transportation Costs $15,000 Total External Failure Costs $19,000 Total Quality Costs $434,000