Interim Quality Performance Report Davis, Inc., had the following quality costs for the years ended December 31, 20x4 and 20x5: 20x4 20x5 Prevention costs: $70,000 115,500 Quality audits $105,000 173,250 Vendor certification Appraisal costs Product acceptance Process acceptance Internal failure costs: $84,000 $126,000 95,000 100,000 Retesting $92,000 $90,000 Rework 200,000 170,000 External failure costs: Recalls $140,000 $112,000 Warranty 340,000 290,000 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