Print Item The long-range performance report compares the current actual quality costs with the costs that would be present if no poor quality existed (a zero-defect state). It is, in effect, a listing of the non-value-added costs and reflects the potential for further savings by improving quality. Example: The actual quality costs for Jackson, Inc. are given below for the year ended, June 30: Prevention costs: Quality Training Reliability engineering $120,000 240,000 Total prevention costs $360,000 Appraisal costs: Materials inspection Process acceptance $126,000 144,000 At the zero-defect state, Jackson expects to spend $75,000 on quality training, $155,000 on reliability engineering, and $37,500 on process acceptance. Assume sales of $12,000,000. Total appraisal costs Internal failure costs: $270,000 Required: 1. Prepare a long-range performance report for the year ended by completing the following table (round costs to the nearest dollar and percentages to the two decimal places): Scrap Rework $75,000 150,000 Jackson, Inc. Long-Range Performance Report For the Year Ended June 30 Actual Costs Total internal failure costs $225,000 Target Costs Variance Prevention costs: External failure costs: Quality Training Customer complaints $97,500 Reliability engineering Warranty 247,500 Total prevention costs Unfavorable Unfavorable Unfavorable Appraisal costs: Total external failure costs $345,000 Materials inspection Total quality costs $1,200,000 Process acceptance Total appraisal costs Unfavorable Unfavorable Unfavorable Internal failure costs: Print Item Process acceptance Total appraisal costs Internal failure costs: Scrap Rework A Total internal failure costs $ External failure costs: Customer complaints Warranty Total external failure costs $ Total quality costs Percentage of sales SA SA SA S A S $ SA Unfavorable Unfavorable Unfavorable Unfavorable Unfavorable Unfavorable Unfavorable Unfavorable Unfavorable % Unfavorable % 10 % 2. The report in Requirement 1 reveals that Jackson is spending too much state total $ on failure activities V. Potential savings from reaching the zero-defect HA