Loring Company had total sales of $$2,400,000$ for fiscal $20$X$1.$ The costs of quality$-$related activities are given below.

Discounts due to defects $$100,000$

Retesting $30,000$

Vendor certification $14,000$

Rework $120,000$

Marketing research $6,000$

Process acceptance $14,000$

Field testing $16,000$

Product liability $200,000$

Required:

$1.$ Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. Round your percentages to two decimal places.

Loring Company

Quality Cost Report

For the Year Ended $20$X$1$

Quality Costs Percentage

of sales

Prevention costs: Marketing research $

$6,000$

Vendor certification fill in the blank $2$

$14,000$

fill in the blank $3$

$20,000$

fill in the blank $4$

$\%$

Appraisal costs:

Field testing $fill in the blank $5$

$16,000$

Process acceptance fill in the blank $6$

$14,000$

fill in the blank $7$

$30,000$

fill in the blank $8$

Internal failure costs:

Rework $fill in the blank $9$

$120,000$

Retesting fill in the blank $10$

$30,000$

fill in the blank $11$

$150,000$

fill in the blank $12$

External failure costs:

Discounts due to defects $fill in the blank $13$

$100,000$

Product liability fill in the blank $14$

$200,000$

fill in the blank $15$

$300,000$

fill in the blank $16$

Total quality costs $fill in the blank $17$

$500,000$

fill in the blank $18$

$\%$

What message does the cost report provide?

The report clearly indicates that quality costs, as a percent of sales, are

than the desired

of sales that prevails for companies with good quality performance.