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Mercury, Incorporated, produces cell phones at its plant in Texas. A year ago, a consumer survey ranked the company's cell phones low in product quality. Shocked by this result, Jorge Gomez, Mercury's president, 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. After working together for a year, the task force prepared the quality cost report shown below:

$\backslash$table$[[$Mercury$,$ Incorporated Quality Cost Report $($in thousands$)],[,$Last Year,This Year$],[$Prevention costs:$],[$Machine maintenance,$ $80,$$ $120],[$Training suppliers,${?}^0,20],[$Quality circles,$0,30],[$Total prevention cost,$80,170],[$Appraisal costs:$],[$Incoming inspection,$30,50],[$Final testing,$90,100],[$Total appraisal cost,$120,150],[$Internal failure costs:$],[$Rework$,60,140],[$Scrap$,50,80],[$Total internal failure cost,$110,220],[$External failure costs:$],[$Warranty repairs,$100,40],[$Customer returns,$330,90],[$Total external failure cost,$430,130],[$Total quality cost,$ $740,$$ $678],[$Total production cost,$ $4,7$ee$,$$ $5,30$e$]]$