QUESTION ONE At the beginning of 2012, Mapato Company, Initiated a quality improvement program. Considerable effort was expended to reduce the number of defective units produced. By the end of 2013, reports from the production manager revealed that Scrap and rework had both decreased. The CPO was pleased to hear of the success but wanted some assessment of the financial impact of the improvements. To mako this assessment, the following financial data were collected for the current and preceding two years: 2011 2012 2013 Sales Scrap Rework Product inspection Sh. 10,000,000 Sh. 10,000,000 Sh.10,000,000 300,000 400,000 125,000 450,000 625,000 100,000 875,000 20,000 80,000 400,000 600,000 120,000 800,000 40,000 40,000 600,000 80,000 Product warranty Quality training Materials inspection 40,000 Required (o) Classify the costs as prevention, appraisal, internal failure, and external failure. (b) Compute total quality costs as a percentage of sales for each of the three years (10 Marks) By how much has profit increased because of quality improvements between 2010, 2012, and 2013? (5 Marks) Consider the quality costs as non-value added activitics. Describe how these activities might be eliminated. (e) (10 Marks) Page 1 of 3