The Buffalo Machine Works of Boulder, CO was evaluating its cost structure relating to quality

costs. In the prior year, the company had lost $$500,000$ in warranty and scrap $($failure costs$).$

They didn't have good numbers for rework costs. In the prior year, they had spent $$100,000$

training employees in quality tools and $$200,000$ for quality assurance personnel $($prevention

costs$).$ Inspection costs were $2\%$ of sales of $$50,000,000($Appraisal costs$).$ Evaluate these

costs and recommend what actions should be taken to upper management.