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Interim Quality Performance Report Davis, Inc., had the following quality costs for the years ended December 31, 2014 and 2015: Prevention costs: 2014 2015 Quality

Interim Quality Performance Report

Davis, Inc., had the following quality costs for the years ended December 31, 2014 and 2015:

Prevention costs: 2014 2015

Quality audits $61,000 91,500

Vendor certification 117,500 176,250

Appraisal costs:

Product acceptance 90,000 135,000

Process acceptance 113,000 115,000

Internal failure costs:

Retesting 106,000 94,000

Rework 182,000 230,000

External failure costs:

Recalls 155,000 124,000

Warranty 330,000 294,000

At the end of 2014, management decided to increase its investment in control costs by 50 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 $11,000,000 for both 2014 and 2015.

Required:

1.Calculate the budgeted costs for 2015.

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