Diego began and embarked on an intensive campaign to strengthen the quality control of his business at the beginning of the current year. During this period, sales grew from $55 million last year to $100 million this year. Diego asks the accounting staff to prepare a cost of quality report from the information compiled below. Note that the information does not include lost sales due to its reputation for poor quality.

Cost (in thousands) 2019 2020 $4,000.00 $2,800.00 $1,800.00 $1,600.00 $200.00 $390.00 Warranty repairs Rework labor Cost of testing equipment Product recalls Systems development $3,000.00 $100.00 $500.00 $680.00 $1,500.00 $2,770.00 $1,800.00 $1,300.00 $30.00 $40.00 $270.00 Inspection Net cost of scrap Supplies used in testing Statistical process control Customer returns of defective goods Quality engineering Downtime due to quality problems $2.200.00 $200.00 $1.020.00 $1.650.00 $500.00 $1.000.00