Brown Company reported sales of $8,100,000 in 2010. At the end of the year, the following quality costs were reported:

Design review ...... $405,000

Recalls ........ 135,000

Re inspection ...... 67,500

Materials inspection .... 54,000

Quality training ...... 135,000

Process acceptance ..... 67,500

Scrap ........... 47,250

Lost sales ........ 270,000

Product inspection .... 40,500

Returned goods .... 128,250

Required:

1. Prepare a quality cost report.

2. Prepare a graph (pie chart or bar graph) that shows the relative distribution of quality costs, and comment on the distribution.