Gulf Company has gathered the following information on quality costs for the year 2017: Quality engineering of products $20,000 Quality training of employees $2,000 Net cost of scrap $30,000 Rework labor $4,500 Warranty repairs $100,000 Product recalls $200,000 Liability arising from defective products $1,000,000 Maintenance of test equipment $44,000 Quality improvement projects $55,000 Setups for testing $3,000 Supplies used in testing $5,500 Downtime caused by defects $70,000 Disposal of defective products $80,000 Assume that year sales totaled $5,000,000 Required:

a. As a manager of quality at the Gulf Company, prepare the quality cost report that organizes the data.

b. Comments on the report.

c. What actions would you take as the quality manager at Gulf Company?