Question: Advanced Memory Technologies Inc. manufactures RAM memory chips for personal computers. An activity analysis was conducted, and the following activity costs were identified with the

Advanced Memory Technologies Inc. manufactures RAM 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 ......$ 90,000

Disposing of scrap ...........97,500

Emergency equipment maintenance ..75,000

Employee training ............30,000

Final inspection .............82,500

Inspecting incoming materials .....22,500

Preventive equipment maintenance ...15,000

Processing customer returns ........75,000

Scrap reporting .............37,500

Supplier development ........15,000

Warranty claims .........210,000

Total .............$ 750,000

Prepare a Pareto chart of these activities.

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