Problem 12-19 (Static) Quality Cost Report [LO12-2] In response to intense foreign competition, Florex Company has taken steps to improve the quality of its products. A summary of its quality costs (in thousands) over the past two years is given below: Sales have been flat over the past few years, at $75,000,000 per year. Required: 1. Prepare a quality cost report for this year and last year. Note: Enter amount values in thousands. Round your percentage answers to 2 decimal places (i.e 0.1234 should be entered as 12.34). \begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{5}{|c|}{ Florex Company } \\ \hline \multicolumn{5}{|c|}{ Quality Cost Report } \\ \hline & \multicolumn{2}{|c|}{ Last Year } & \multicolumn{2}{|c|}{ This Year } \\ \hline & \begin{tabular}{l} Amount (in \\ thousands) \end{tabular} & \begin{tabular}{l} Percent of \\ Sales \end{tabular} & \begin{tabular}{l} Amount (in \\ thousands) \end{tabular} & \begin{tabular}{l} Percent of \\ Sales \end{tabular} \\ \hline \multicolumn{5}{|l|}{ Prevention costs: } \\ \hline Quality engineering & 420 & & 570 & \\ \hline Systems development & 480 & & 750 & \\ \hline Statistical process control & 0 & & 180 & \\ \hline Total prevention costs & 900 & 0.00 & 1,500 & 0.00 \\ \hline \multicolumn{5}{|l|}{ Appraisal costs } \\ \hline Inspection & 750 & & 900 & \\ \hline Product testing & 810 & & 1,200 & \\ \hline Supplies used in testing & 30 & & 60 & \\ \hline Depreciation of test equipment & 210 & & 240 & \\ \hline Total appraisal costs & 1,800 & 0.00 & 2,400 & 0.00 \\ \hline \multicolumn{5}{|l|}{ Internal failure costs: } \\ \hline Net cost of scrap & 630 & & 1,125 & \\ \hline Rework labor & 1,050 & & 1,500 & \\ \hline Disposal of production defects & 720 & & 975 & \\ \hline Total internal failure costs & 2,400 & 0.00 & 3,600 & 0.00 \\ \hline \multicolumn{5}{|l|}{ External failure costs: } \\ \hline Cost of field servicing & 1,200 & & 900 & \\ \hline Warranty repairs & 3,600 & & 1,050 & \\ \hline Product recalls & 2,100 & & 750 & \\ \hline Total external failure costs & 6,900 & 0.00 & 2,700 & 0.00 \\ \hline Total quality cost & $12,000 & & 10,200 & \\ \hline \end{tabular}