Mercury, Inc., produces cell phones at its plant in Texas. In recent years, the company's market share has been eroded by stiff competition from overseas. Price and product quality are the two key areas in which companies compete in this market. A year ago, the company's cell phones had been ranked low in product quality in a consumer survey. Shocked by this result, Jorge Gomez Mercury's president, initiated an intense effort to improve product quality. Gomez set up a task force to implement a formal quality improvement program. Included on this task force were representatives from the Engineering, Marketing. Customer Service, Production, and Accounting departments. The broad representation was needed because Gomez believed that this was a companywide program and that all employees should share the responsibility for its success After the first meeting of the task force, Holly Elsoe, manager of the Marketing Department, asked John Tran, production manager, what he thought of the proposed program. Tran replied, "I have reservations. Quality is too abstract to be attaching costs to it and then to be holding you and me responsible for cost improvements. I like to work with goals that I can see and count! I'm nervous about having my annual bonus based on a decrease in quality costs, there are too many variables that we have no control over." Mercury's quality improvement program has now been in operation for one year. The company's most recent quality cost report is shown below Mercury. Inc. Quality Cost Report (in thousands) Last Year This Year $ 240 $ 115 22 270 50 170 22e Prevention costs: Machine maintenance Training suppliers Quality circles Total prevention cost Appraisal costs: Incoming inspection Final testing Total appraisal cost Internal failure costs: Rework Scrap Total internal failure cost External failure costs: Warranty repairs Customer returns Total external failure cost Total quality cost Total production cost 140 208 258 323 $1,021 5 570 4.540 $ 4,140 $ 1. Expand the company's quality cost report by showing the costs in both years as percentages of both total production cost and total quality cost. (Round your percentage answers to 1 decimal place (ie 0.1234 should be entered as 12.3).) Answer is complete but not entirely correct. Mercury, Inc. Quality Cost Report [in thousands) Last Year Percentage of Percentage of Total Production Total Quality Cost Cost This Year Percentage of Total Production Cost Amount Amount Percentage of Total Quality Cost 240 115 23.5 08 2.2 0.2 20.2 2.6 132 360 25 0.3 1.7 255 Prevention costs: Machine maintenance Training suppliers Quality circles Total prevention costs Appraisal costs Incoming inspection Final testing Total appraisal costs Internal failure costs 0.6 % 49 15.1 216 . 200 Rework 13.7 11.93 11.4 2014 233 Scrap Total internal failure costs External fature costs: Warranty repais 6.4 x 250 253 31.7 5.3 15.4 20.7 100.0 Customer returns Tot estomalta oss Total quality cost Total production cost 323 $ 1,021 1002 118 570 4,540 $ 4,140