Chris Hines is the manager of Lumble Manufacturing and is interested in doing a cost of quality analysis. The following cost and revenue data are available for the most recent year ended December 31:

Sales revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $250,000

Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,000

Warranty expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,000

Inspection costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000

Scrap and rework . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000

Product returns due to defects . . . . . . . . . . . . . . . . . 6,000

Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000

Machine maintenance expense . . . . . . . . . . . . . . . . . . 2,000

Wage expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000

Machine breakdown costs . . . . . . . . . . . . . . . . . . . . . 4,000

Estimated lost sales due to poor quality . . . . . . . . . . . 5,000

a. Classify each of the above costs into the four quality cost categories and prepare a cost of quality report for Lumble.

b. What percentage of sales revenue is being spent on prevention and appraisal activities?

c. What percentage of sales revenue is being spent on internal and external failure costs?