Yedder Enterprises was a pioneer in designing and producing precision surgical lasers. Yedder's product was brilliantly designed, but the manufacturing process was neglected by management; consequently, quality problems have been chronic. When customers complained about defective units, Yedder would simply send out a repair person or replace the defective unit with a new one. Recently, several competitors have come out with similar products without Yedder's quality problems, and Yedder's sales have consequently declined. To remedy the situation, Yedder embarked on an intensive campaign to strengthen its quality control at the beginning of the current year. These efforts met with some success-the downward slide in sales was reversed, and sales grew from $95 million last year to $100 million this year. To help monitor the company's progress, costs relating to quality and quality control were compiled for last year and for the first full year of the quality campaign this year. The costs, which do not include the lost sales due to a reputation for poor quality, appear below: Costs (in thousands) Last Year This Year Product recalls $3, 500 Systems development 120 680 Inspection 1, 700 2, 770 Net cost of scrap 800 1, 300 Supplies used in testing 30 40 Warranty repairs 3,300 2,800 Rework labour 1, 400 1, 600 Statistical process control 270 Customer returns of defective goods 3, 200 20 Cost of testing equipment 27 390 Quality engineering 1, 080 1, 650 Downtime due to quality problems 600 1, 100 Required: 1. Prepare a quality cost report for both this year and last year. (Round your percentage answers to 2 decimal places.) YEDDER ENTERPRISES Quality Cost Report (in thousands of dollars) Last Year This Year Amount Percent Amount Percent |Prevention costs % Total prevention cost 0 0.00 0 0.00 Appraisal cost Total appraisal cost 0 0.00 0 0.00 Internal failure costs: Total internal failure cost 0 0.00 0 0.00

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