Required information [The following information applies to the questions displayed below.] 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: Cost of testing equipment Customer returns of defective goods Downtime due to quality problems Inspection Net cost of scrap Product recalls Quality engineering Rework labor Statistical process control Supplies used in testing Systems development Warranty repairs Costs (in thousands) Quarter 1 Quarter 2 $ 270 $ 390 $3,200 $ 200 $ 600 $1,100 $1,700 $2,770 $ 800 $1,300 $3,500 $ 600 $1,080 $1,650 $1,400 $1,600 $ 0 $ 270 $ 30 $ 40 $ 120 $ 680 $3,300 $2,800 The company's sales were $95 million in Quarter 1 and $100 million in Quarter 2. Classification Q1% of Sale Q2 Amount Q2 % of Sales Cost Description Cost of testing equipment Customer returns of defective goods Downtime due to quality problems Inspection Net cost of scrap Product recalls Quality engineering Rework labor Statistical process control Supplies used in testing Systems development Warranty repairs Harvey Company Quality Cost Report (in thousands) Quarter 1 Q1% of Total Q1 Amount Quality Cos $ 270 0.0% $ 3,200 0.0% $ 600 0.0% $ 1,700 0.0% $ 800 0.0% $ 3,500 0.0% $ 1,080 0.0% $ 1,400 0.0% $ 0.0% $ 30 0.0% $ 120 0.0% $ 3,300 0.0% 0.0% $ 0.0% $ 0.0% $ 0.0% $ 0.0% $ 0.0% $ 0.0% $ 0.0% $ 0.0% $ 0.0% $ 0.0% $ 0.0% $ 390 200 1,100 2,770 1,300 600 1,650 1,600 270 Quarter 2 Q2 % of Total Quality Cos 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 40 680 2,800 2. Go to the tab titled Template B: a. Use VLOOKUP to identify the proper quality cost classification that should appear in cells B6 through B17. (Hints: Your VLOOKUP formula in cell B6 will refer to Template A to find the cost that matches the description in cell A6 of Template B. Once a match is found your formula will instruct Excel to take the corresponding cost classification from Template A and insert it into cell B6 of Template B. Use absolute references where needed when creating your formula in cell B6 because this will enable you to copy the formula into cells B7 through B17.) b. What quality cost classification should appear in cells B9, B12, and B17? c. Using Exhibit 12-7 as your guide, prepare a quality cost report for Quarters 1 and 2. Your quality cost report should list prevention costs first followed by appraisal, internal failure, and external failure costs. (Hints: First, sort all rows of data by quality cost classification (A-2). Second, select cells A5 through H17 and use the Excel's subtotal function to create subtotals within columns C through H by classification type. d. What are the first quarter's total prevention, appraisal, internal failure, and external failure costs? What are the same four amounts for the second quarter? e. What are the first quarter's total prevention, appraisal, internal failure, and external failure costs each stated as a percent of the first quarter's total cost of quality? What are the same four percentages for the second quarter? f. What are the first quarter's total prevention, appraisal, internal failure, and external failure costs each stated as a percent of the first quarter's sales? What are the same four percentages for the second quarter? Complete this question by entering your answers in the tabs below. Req 2B Req 2D Reg 2E Req 2F What quality cost classification should appear in cells B9, B12, and B17? Inspection (cell B9) Quality engineering (cell B12) Warranty repairs (cell B17) Appraisal Prevention External failure Complete this question by entering your answers in the tabs below. Req 2B Req 2D Req 2E Req 2F What are the first quarter's total prevention, appraisal, internal failure, and external failure costs? What are the same four amounts for the second quarter? Quarter 1 (in thousands) Quarter 2 (in thousands) Prevention Appraisal Internal failure External failure Complete this question by entering your answers in the tabs below. Req 2B Reg 2D Req 2E Req 2F What are the first quarter's total prevention, appraisal, internal failure, and external failure costs each stated as a percent of the first quarter's total cost of quality? What are the same four percentages for the second quarter? (Round your answers to 1 decimal place.) Quarter 1 (%) Quarter 2 (%) Prevention % % Appraisal % % Internal failure % % External failure % % % Complete this question by entering your answers in the tabs below. Req 2B Req 2D Req 2E Req 2F What are the first quarter's total prevention, appraisal, internal failure, and external failure costs each stated as a percent of the first quarter's sales? What are the same four percentages for the second quarter? (Round your answers to 1 decimal place.) Quarter 1 (%) Quarter 2 (%) % Prevention % % % Appraisal Internal failure % % External failure % %