In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of its quality costs (in thousands) over the past two years is given below: Costs (in thousands) Last Year This Year Inspection Quality engineering $750 $900 $420 $570 Depreciation of test equipment $210 $240 Rework labor $1,050 $1,500 Statistical process control $0 $180 Cost of field servicing $1,200 $900 Supplies used in testing $30 $60 Systems development $480 $750 Warranty repairs $3,600 $1,050 Net cost of scrap $630 $1,125 Product testing Product recalls $810 $1,200 $2,100 $750 Disposal of production defects $720 $975 Sales have been flat over the past few years, at $75,000,000 per year. Required: 1. Prepare a quality cost report for this year and last year. Carry percentage computations to two decimal places. 2. Prepare a written evaluation that discusses the distribution of quality costs, changes in the distribution from last year to this year, and reasons for those changes