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(LO5) 7-46 Preparing a cost-of-quality report The following data have just been gathered on last year's quality-related costs at the Ideal Company: COST CATEGORY AMOUNT Product recalls . . . . . $ 325,000 Downtime due to defects . . . $ 600,000 Warranty claims . . . . . . . . . . . . . . . . . S 420,000 Inspection of and testing of incoming materials $ 300,000 Product liability lawsuits . . . $ 500,000 Process quality audits. . . $ 350,000 Rework costs . . . . . $2,000,000 Quality training . . . . . . . . $ 150,000 Process control monitoring. S 350,000 Repair costs in the field . . . $ 375,000 Statistical process control. . . $ 300,000 Waste . . . . . 900,000 Net cost of scrap. . $1,500,000 Supplier certification . $ 350,000 Quality engineering. $ 200,000 Returned products . . . . . $ 380,000 Total sales last year were $75 million. Required (a) Prepare a cost-of-quality report grouping costs into prevention, appraisal, internal failure, and external failure. Also show costs as a percentage of sales. (b) Interpret the data and make recommendations to Ideal's management