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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

image text in transcribedimage text in transcribed 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: 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. Note: Enter amount values in thousands. Round your percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.34). \begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{5}{|c|}{ Florex Company } \\ \hline \multicolumn{5}{|c|}{ Quality Cost Report } \\ \hline & \multicolumn{2}{|c|}{ Last Year } & \multicolumn{2}{|c|}{ This Year } \\ \hline & \begin{tabular}{l} Amount (in \\ thousands) \end{tabular} & \begin{tabular}{l} Percent of \\ Sales \end{tabular} & \begin{tabular}{l} Amount (in \\ thousands) \end{tabular} & \begin{tabular}{c} Percent of \\ Sales \end{tabular} \\ \hline \multicolumn{5}{|l|}{ Prevention costs: } \\ \hline Quality engineering & 420 & & 570 & \\ \hline Statistical process control & 0 & & 180 & \\ \hline Systems development & 480 & & 750 & \\ \hline Total prevention costs & 900 & 0.00 & 1,500 & 0.00 \\ \hline \multicolumn{5}{|l|}{ Appraisal costs } \\ \hline Inspection & 750 & & 900 & \\ \hline Depreciation of test equipment & 210 & & 240 & \\ \hline \multicolumn{5}{|l|}{ Supplies used in testing } \\ \hline \multicolumn{5}{|l|}{ Product testing } \\ \hline Total appraisal costs & 960 & 0.00 & 1,140 & 0.00 \\ \hline \multicolumn{5}{|l|}{ Internal failure costs: } \\ \hline Rework labor & 1,050 & & 1,500 & \\ \hline Net cost of scrap & 630 & & 1,125 & \\ \hline Disposal of production defects & 720 & & 975 & \\ \hline Total internal failure costs & 2,400 & 0.00 & 3,600 & 0.00 \\ \hline \multicolumn{5}{|l|}{ External failure costs: } \\ \hline \multicolumn{5}{|l|}{ Cost of field servicing } \\ \hline \multicolumn{5}{|l|}{ Warranty repairs } \\ \hline \multicolumn{5}{|l|}{ Product recalls } \\ \hline Total external failure costs & 0 & 0.00 & 0 & 0.00 \\ \hline Total quality cost & & & & \\ \hline \end{tabular}

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