Costen, Inc., produces cellphone equipment. Jessica Tomly, Costen's president, decided to devote more resources to the improvement of product quality after learning that her company had been ranked fourth in product quality in a 2009 survey of cellphone users. Costen's quality improvement program has now been in operation for two years, and the cost report shown here has recently been issued. Semi-Annual Cost of Quality Report Costen, Inc. 30/06/2010 31/12/2010 30/06/2011 31/12/2011 440 000 20 000 50 DOD 510 000 440 000 100 000 214 000 754 000 390 000 50 000 210 000 650 000 330 000 40 000 200 000 570 000 108 000 332 000 440 DOO 123 000 332 DOD 455 000 90 000 293 000 383 000 63 000 203 000 266 000 Prevention costs Maintenance Supplier training Design reviews Total Appraisal costs Incoming inspections Final testing Total Internal failure costs Rework Scrap Total External failure costs Warranty repairs Customer returns Total Total quality costs Total revenues 231 000 124 000 355 000 202 000 116 000 318 000 165 000 71 000 236 000 112 000 67 000 179 000 165 000 570 000 735 000 2 040 000 8 240 000 85 DDD 547 000 632 000 2 159 000 9 080 000 72 000 264 000 336 000 1605 000 9 300 000 68 000 188 000 256 000 1 271 000 9 020 000 Required: 4.1 For each period, calculate the ratio of each cost of quality category to quality costs. to total 4.2 3 Based on the results in 4.1, would you conclude that Costen successful? Prepare a short report to present your case. 60