Question: 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
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:
ActivitiesActivity Cost
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.
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