Question 6 (22 marks) SR Company manufactures two types of Computers, CX1 and CX2. The labour rates per hour for design is $75 per hour while for that of testing and inspection is $40 per hour Other information on each computer is given below CX1 CX2 $500 $600 Rework costs per computer Repair costs per computer Estimated lost sales from poor quality Percentage of units reworked in plant Percentage of units repaired at customer's site Selling price Units manufactured and sold Variable costs per unit Hours spent on design Testing and inspection hours/unit 6% 4% 2,000 10,000 units 1,200 5,500 0.8 $400 $450 250 units 12% 8% 1,550 5.000 units 700 1,500 0.5 Required: 1. Prepare a cost of quality report for each type of computer; calculate the ratio of each COQ category as a percentage of revenues. (8 marks) 2. Prepare a detailed written evaluation to accompany the reports you have prepared in (1) above and make necessary recommendations. (8 marks) 3 The company uses a job-order costing system and manager is not sure the treatment of rework labour cost and disposal of defective products in the accounting system. Please advise (6 marks)