a. Using the information in Exercise 15, identify the cost of quality classification for each activity.
b. Prepare of cost of quality report. Assume sales for the period were $4,000,000. (Round percentages to one decimal place.)
c. Interpret the cost of quality report.
Meagher Solutions Inc. manufactures memory chips for personal computers. An activity analysis was conducted, and the following activity costs were identified with the manufacture and sale of memory chips:
Activities _______________________________ Activity Cost
Correct shipment errors ............................... $ 150,000
Disposing of scrap ......................................... 95,000
Emergency equipment maintenance ................... 125,000
Employee training .......................................... 50,000
Final inspection ............................................. 80,000
Inspecting incoming materials ............................ 60,000
Preventive equipment maintenance ...................... 40,000
Processing customer returns .............................. 90,000
Scrap reporting .............................................. 45,000
Supplier development ....................................... 15,000
Warranty claims ............................................ 250,000
Total ...................................................... $1,000,000
Prepare a Pareto chart of these activities?