HomeNeat, Co. has two division that produce Napkins and Towels. The manager of HomeNeat, Co. just received data for preparing quality cost report as per Dec 31, 2021, as follows:

Napkins ($) Towels ($) Product liability 7,500 1,000 Quality reporting 1,000 7,500 Scrap 500 1,000 Allowances 12,000 5,000 Inspection of materials 3,000 2,000 Downtime 1,200 4,000 Quality training 2,300 12,000 Quality audits 2,500 2,000 Product acceptance 1,500 7,000 Rework 2,500 1,000 Customer complaints 5,750 4,000 Quality engineering 3,750 3,500 Process acceptance 1,000 1,000

Required: 1. Assume that sales revenue for Napkins Division is $600,000 and Towels is $1,000,000. Prepare quality cost report for both divisions for Dec 31, 2021. Report should consist of relative distribution of cost for each quality cost category. (15%) 2. Refer to question 1, which division performed better in managing cost of quality. Give your analysis. (5%) 3. The CFO want to reduce the quality cost to no more than 5%, do you think both divisions can achieve the CFOs target? If yes, how? (5%)