In response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the quality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amount of warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and quality control over the last two years are given below: Costs (in thousands This Last Year Year 00 1,503 Inspection ineering Depreciation of test equipment 450 720 S 315 135 Rework labor Statistical process control Cost of field servicing Supplies used in testing Systems development Warranty repairs Net cost of scrap Product testing Product recals Disposal of defective products 1,080 1,890 180 S 1,260 S 1,170 45 7 2 900 1,530 1,260 1,350 1, 900 540 4,680 720 1,080 2. 900 Sales have been flat over the past few years, at $90,000,000 per year. A great deal of money has been spent in the effort to upgrade quality, and management is anxious to see whether or not the effort has been effective. Required: 1. Prepare a quality cost report that contains data for both this year and last year. (Enter amount values in thousands. Round your percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.34).) Total prevention costs 990 1.20 1,800 2.00 Appraisal costs 900 1.00 Inspection 1,503 1.20 45 72 0.04 Supplies used in testing 0.08 Depreciation of test equipment 135 0.28 315 0.32 1.60 Total appraisal costs 1,080 1.32 1,890 Internal failure costs 1,260 0.84 Net cost of scrap 720 1.50 1.62 x Rework labor 1,080 1,890 2.00 900 0.96 Disposal of defective products 900 1.30 2,700 3.42 4,050 4.80 Total internal failure costs External failure costs: Product recalls 2,880 2.80 1,080 1.00 Cost of field servicing 1.60x 1,260 1,170 1.20 Product testing 1,080 1.08 1,350 1.60 Total external failure costs 5,220 5.48 3,600 3.80 Total quality cost