Quality costs analysis: manufacturer Lightning Technologies Ltd (LTL) produces two extrusion machines that are very popular with plastics manufacturers: model ABC and model XYZ. Model ABC has an average selling price of $45 000, and model XYZ sells for about $40 500. The company is concerned about the differing performance ofthe two machines in relation to quality, and has collected the following information: Model ABC Model m No. of machines (units) produced and sold 80 100 Warranty Costs: Average repair cost per unit $1 800 $600 Percentage of units needing repairs 730% 10% Reliability engineering at $225 per hour 1600 hours 2000 hours Rework at LTL's manufacturing plant: Average rework cost per unit reworked $2 850 $2 400 Percentage of units needing rework 35% 25%. Manufacturing inspection at $75 per hour 300 hours 500 hours Transportation costs to customer sites to fix problems $44 250 $22 500 Quality training for employees $52 500 $15 000 Required: 1. Classify the above quality costs as prevention, appraisal, internal failure or external failure. 2. Prepare a'cost of quality report in dollars for model ABC, using a similar format to Exhibit '1 6.1 1 . In addition, add a further column showing all quality costs as a percentage of sales revenue. 3. Prepare a similar cost of quality report for model XYZ. 4. Comment on the two reports. noting whether the company Is investing Its quality expendlture differently for the two machines