Activity-Based Quality Costing

Ivanov, Inc., produces two different generators and is concerned about their quality. The company has identified the following quality activities and costs associated with the two products:

	Generator A	Generator B
Units produced	169,800	342,600
Warranty work (units)	1,800	790
Scrapped units (number)	3,500	840
Inspection (hours)	3,350	1,660
Quality training (hours)	83	83
Activities:
Performing warranty work	$821,030
Scrapping units	633,640
Inspecting	290,580
Quality training	83,000

Required:

1. Calculate the quality cost per unit for each product, and break this unit cost into quality cost categories. If required, round your answers to the nearest cent.

	Generator A	Generator B
Unit cost	$fill in the blank 1	$fill in the blank 2

Which of the two seems to have the lowest quality?

Generator AGenerator BNot enough information is given to answer