The actual quality costs of Elite Company, for the fiscal years ended December 31, 20X1 and 20X2, are given below.

20X1 20X2

Prevention costs:

Quality engineering $150,000 $172,500

Quality training 16,000 18,400

Marketing research 15,000 17,250

Vendor certification 20,000 23,000

Appraisal costs:

Materials inspection 100,000 116,000

Product acceptance 250,000 295,000

Internal failure costs:

Scrap 600,000 525,000

Retesting 45,000 40,000

External failure costs:

Discounts due to defects 250,000 220,000

Product liability 600,000 900,000

At the end of 20X1, Elite's management decided to increase its investment in control costs by 15% for each category's items with the expectation that failure costs would decrease by 15% for each item of the failure categories. Sales were reported to be $20,000,000 for both 20X1 and 20X2.

How to calculate the budgeted costs for 20X2, and an interim quality performance report.