Interim Quality Performance Report Davis, Inc., had the following quality costs for the years ended December 31, 20x4 and 20x5: 20x1 20x5 Prevention costs: Quality sullis $75,000 S112.500 Vendul cerlilication 116,500 177,750 Appraisal costs: Product acceptance $87,000 $130,500 Process acceptance 111.000 112,500 Internal failure costs: Retesting $96,000 $98,000 $ Rework 200,000 176,000 External failure costs: Recalls $135,000 $108,000 Warranty 305,000 910, IXIO At the end of 2014, management decided to increase its investment in control costs hy ':0 percent for each category's items with the expectation that failure costs would decrease by 20 percent for each item of the failure categories. Sales were $12,00,100 for hoth 2044 and 20/x's. Required: 1. Calculate the budgeted costs for 20x5. Prepare an interim quality performance report. Enter all answers as positive amounts. If there is no variance enter "O" for your answer. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table, select "Favorable" if it is favorable, or No effect if there is no change. Round percentage answers to two decimal places. For example, 5.799% would be entered as "S.79". Davis, Inc. Interim Standard Perlormance Report: Quality Costs For the Year Ended December 31, 20x5 Actual cos Sudorted Costs Vanance Unfavorable, lavorable or No offert Prevention costs: Total prevention costs Die TO Challge. ial places. Davis, Inc. Interim Standard Performance Report: Quality Costs For the Year Ended December 31, 20x5 Actual Costs Budgeted Costs Variance Unfavorable, Favorable or No effect Prevention costs: Total prevention costs Appraisal costs: Total appraisal costs Internal failure costs: $ b) od ood Total internal failure costs External failure costs: $ $ Total external failure costs $ $ Total quality costs $ % % Percentage of sales 2. What can be inferred from the report regarding the progress Davis has made? 3. What if sales were $12,500,000 for 20x4 and $15,625,000 for 20x5? What adjustment to budgeted rework costs would be made? (Note: Quality auditing is a discretionary cost and its budget is not affected by the change in sales revenue in 20x5.) New total budgeted rework costs