Interim Quality Performance Report Davis, Inc., had the following quality costs for the vears ended December 31, 20x4 and 20x5: 20x4 20x5 Prevention costs: $96,000 Quality audits $64,000 Vendor certification 127,500 191,250 Appraisal costs: $84,000 Product acceptance $126,000 Process acceptance 91,000 100,000 Intermal failure costs: Retesting $90,000 $94,000 204,000 Rework 179,000 External fallure costs: Recalls $145,000 $116,000 Warranty 320,000 306,000 At the end of 20x4, 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 20x4 and 20x5. 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 "0" 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, 5.789% would be entered as "5.79". Davis, Inc. Interim Standard Performance Report: Quality Costs For the Year Ended December 31, 20x5 Budgeted Costs Actual Costs Variance Unfavorable, Favorable or No effect Prevention costs: Total prevention costs Appraisal costs: Total appraisal costs Internal failure costs: 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 $11,000,000 for 20x4 and $13,750,000 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: $