Roxi, Inc. is using a costs$-$of$-$quality approach to evaluate design engineering efforts for a new skateboard. Roxi's senior managers expect the engineering work to reduce appraisal, internal failure, and external failure activities. The predicted reductions in activities over the two$-$year life of the skateboards follow. Also shown are the predetermined overhead allocation rates for each activity.

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Read the requirements.

Requirement $1.$ Calculate the predicted quality cost savings from the design engineering work.

$\backslash$table$[[,\backslash$table$[[$Predicted$],[$Reduction in$],[$Activity Units$]],\backslash$table$[[$Predetermined$],[$Overhead Allocation$],[$Rate per Unit$]],\backslash$table$[[$Predicted$],[$Quality Cdit$],[$Savings$]]],[$Inspection of incoming raw materials,$415,45,],[$Inspection of finished goods,$415,26,],[$Number of defective units discovered in$-$house,$1,000,51,],[$Number of defective units discovered by customers,$250,69,],[$Lost sales due to dissatisfied customers,$225,98,],[$Total predicted quality cost savings,,,$]]$

Requirement $2.$ Roxi spent $$107,000$ on design engineering for the new skateboard. What is the net benefit of this "preventive" quality activity?

The net benefit of the "preventive" quality activity is

Requirement $3.$ What maior difficulty would Roxi's manaqers have in implementina this costs$-$of$-$quality approach? What alternative approach could they use to