Pool-Glow, Inc. has developed a new light for lighting swimming pools. After doing market research, it has been determined that customers would be willing to pay $140 for this light. Pool-Glow seeks to earn a 25% profit on the light. At present, Pool-Glow makes an old-style light for $101.25, which sells for $130.

(1.) What must the target cost be in order to earn the 25% profit that the company demands?
(2.) If Pool-Glow can adjust its costs to the target cost, the company estimates that it can sell 50,000 lights. What would Pool-Glow's profit be at this point?
(3.) How many of the old-style lights would have to be sold to reach the same profit?

Explain how it is possible to reduce the total cost of quality by increasing the amount spent on prevention and appraisal activities.