"re-Built Problems i Saved Mercury's quality improvement program has now been in operation for one year. The company's most recent quality cost report is shown below. Mercury, Inc. Quality Cost Report (in thousands) Last This Year Year Prevention costs: Machine maintenance Training suppliers Quality circles Total prevention cost Appraisal costs: Incoming inspection Final testing Total appraisal cost. $ 240 $ 115 8 15 22 75 270 205 50 28 170 86 220 114 Internal failure costs: Rework 140 6B Scrap 68 65 Total internal failure cost 208 133 External failure costs: Warranty repairs 65 30 Customer returns 258 88 Total external failure cost 323 118 Total quality cost $1,021 $ 570 Total production cost $4.140 $ 4,540