Click here to open your MyFinanceLab Study Plan and work these interactive problems online. 19-18 Costs of quality. (CMA, adapted) Osborn, Inc., produces cell phone equipment. Amanda Westerly, Osborn's president, implemented a quality-improvement program that has now been in operation for 2 years. The cost report shown here has recently been issued. Semi-Annual COQ Report, Osborn, Inc. (in thousands) 6/30/2016 12/31/2016 5/30/2017 12/31/2017 Prevention costs maintenan $ 480 $ 480 $ 440 $ 290 Supplier training 21 06 45 35 Design reviews 30 218 198 196 Total prevention costs 531 788 683 521 Appraisal costs Incoming inspections 109 124 89 55 Final testing 327 327 302 202 Total appraisal costs 436 451 391 257 Internal failure costs Rework 226 206 166 115 Scrap 127 124 68 65 Total internal failure costs 353 330 234 180 External failure costs Warranty repairs 182 89 70 67 Customer returns 594 510 263 186 Total external failure costs 776 599 333 253 Total quality costs $2,096 $2,168 $1,641 $1,211 I revenues $8,220 $9,180 $9,260 $9,050 1. For each period, calculate the ratio of each COQ category to revenues and to total quality costs. Required 2. Based on the results of requirement 1, would you conclude that Osborn's quality program has been successful? Prepare a short report to present your case. 3. Based on the 2015 survey, Amanda Westerly believed that Osborn had to improve product quality. In making her case to Osborn management, how might Westerly have estimated the opportunity cost of not implementing the quality-improvement program