Options for #1 in order, also determine if favorable or unfavorable - 
Options for # 2 - 
Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. Prevention costs: Prototype inspection Vendor certification $360,000 720,000 $ 1,080,000 Total prevention costs Appraisal costs: Process acceptance $ 375,000 Test labor 420,000 Total Appraisal costs $ 795,000 Internal failure costs: Retesting $ 217,500 Rework 435,000 Total internal failure costs $ 652,500 External failure costs: Recalls $ 284,000 Product liability 550,250 $ 834,250 Total external failure costs Total quality costs $3,361,750 At the zero-defect state, Nabors expects to spend $450,000 on prototype inspection, $90,000 on vendor certification, and $35,000 on process acceptance. Assume sales to be $2,200,000. Required: 1. Prepare a long-range performance report for 20x5. Enter all answers as positive amounts. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table. Select "Favorable" if it is favorable. Round percentage answers to two decimal places, if rounding is required. For example, 5.789% would be entered as "5.79". Enter "0" as the target cost amount if there would be no cost at the zero-defect state. Required: 1. Prepare a long-range performance report for 20x5. Enter all answers as positive amounts. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table. Select "Favorable" if it is favorable. Round percentage answers to two decimal places, if rounding is required. For example, 5.789% would be entered as "5.79". Enter "0" as the target cost amount if there would be no cost at the zero-defect state. Nabors Company Long-Range Performance Report For the Year Ended June 30, 20x5 Actual Costs Target Costs Budget Variance Favorable; or Unfavorable Prevention costs: Total prevention costs Appraisal costs: Total appraisal costs Internal failure costs: od od od od poj od nodi poti puno po po Total internal failure costs External failure costs: Total external failure costs Total quality costs Percentage of sales % Packaging inspection Product liability Prototype inspection Recalls Retesting Packaging inspection Product liability Recalls Retesting Vendor certification Process acceptance Product liability Quality engineering Recalls Retesting Product liability Quality engineering Recalls Retesting Test labor Packaging inspection Product liability Quality engineering Recalls Retesting Packaging inspection Product liability Quality engineering Recalls Rework Packaging inspection Quality engineering Recalls Retesting Rework Packaging inspection Product liability Quality engineering Retesting Rework 2. Why are quality costs still present for the zero-defect state? Inefficiencies mean that some defects will still occur. Prevention costs are value-added costs that are necessary to maintain the quality gains. Some non-value-added costs will still persist, even at the zero-defect state
