The following information pertains to Omni, Inc., for 19×8:
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| External failure costs | 900,000 |
| Internal failure costs | 1,800,000 |
| Prevention costs | 400,000 |
| Appraisal costs | 600,000 |
1. Calculate each category of quality costs as a percentage of sales.
2. Calculate total quality costs as a percentage of sales.
3. If quality costs were reduced to 2.5 percent of sales, determine the increase in profit that
would result.
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