Required information [The following information applies to the questions displayed below. ,7 Harvey Company designs and produces surgical lasers. Its product is brilliantly designed, but the manufacturing process has been plagued by chronic quality control problems. To help address the situation, Harvey formed a cross-functional team of managers that quantified its costs of quality over the last two quarters as follows: Costs (in thousands) Quarter 1 Quarter 2 Cost of testing equipment $ 270 $ 390 Customer returns of defective goods $ 3,200 $ 200 Downtime due to quality problems $ 600 $ 1,100 Inspection $ 1, 700 $ 2, 770 Net cost of scrap $ 800 $ 1,300 Product recalls $ 3,500 $ 600 Quality engineering $ 1,080 $ 1,650 Rework labor $ 1,400 $ 1,600 Statistical process control $ 0 $ 270 Supplies used in testing $ 30 $ 40 Systems development $ 120 $ 680 Warranty repairs $ 3, 300 $ 2, 800 The company's sales were $95 million in Quarter1 and $100 million in Quarter 2. 4. Based on a review of the quality cost report and the bar graphs, which ofthe following statements is true? 0 The total cost of quality declined from the first quarter to the second quarter. 0 The external failure costs as a percent of the total cost of quality increased from the first quarter to the second quarter. 0 The prevention and appraisal costs both decreased from the first quarter to the second quarter