Exercise 2 is a quality cost analysis assignment. It consists of two parts, each worth 5 points. Important Note: You must have completed Exercise 2A with a score of 3 points or better to qualify to earn credit for the Exercise 2B analysis. Exercise 2B: PAF Cost Analysis (5 Points). Using the solution to Exercise 2A provided below, you are to: 1) calculate the quality cost ratios and percentages for the calculations required on the 2nd page of this handout and 2) answer the two questions that follow. You are to type your responses in this form. Muncie Computer Corporation (MCC) Quality Cost Data Prevention Costs: 1. Plant Process Engineering $ 659,221 2. QMS Planning $ 304,552 3. Supplier Assessment (New Purchase Contracts) $ 265,952 4. Corporate Process Engineering $ 123,006 5. Operator Training and Certification $ 77,205 6. QMS Documentation $ 65,852 7. Design of Test Procedures $ 24,456 Total Prevention Cost $ 1,520,244 Appraisal Costs: 1. Supplier Monitoring (Existing Purchase Contracts) $ 117,308 2. Product Line 1 Inspection $ 59,225 3. Product Line 2 Inspection $ 47,337 4. Inspection and Test Setup $ 36,558 5. Receiving and Inspection $ 12,000 6. Laboratory Acceptance Testing $ 12,000 Total Appraisal Cost $ 284,428 Failure Costs: 1. Warranty Repairs $ 302,502 2. Lost Production (Labor Shortages) $ 252,366 3. Lost Production (Material Shortages) $ 106,223 4. Buffer Inventory Stocks $ 47,380 5. Customer Adjustments $ 31,995 6. Production Scrap $ 29,875 7. Corrective Maintenance to Machinery $ 23,855 Total Failure Cost $ 794,196 Total MCC Quality Cost: Total Quality Cost $ 2,598,868 In the table provided below, show all formula setups and solutions for the following required calculations. Make sure that you double-check your decimal places used and truncate all calculations appropriately. Follow the Exercise 1 solution if you don't know how to do this properly. Ratio of: Prevention to Failure Costs Appraisal to Failure Costs Prevention + Appraisal Costs to Failure Costs Proportion (%) of: Prevention to Total Quality Costs Appraisal to Total Quality Costs Failure to Total Quality Costs What is your interpretation of CMC's quality data? Are they doing well or poorly? Why? How do you know this? [Type your response here! ] What priority should be placed in addressing their quality costs? Make sure that you state clear reasons why? Note: You are to examine your quality costs in detail and provide specific cost recommendations. Generic descriptions such as lower failure costs are insufficient. Now that you know your specific costs and have ranked them for each category, what can and should the company do? [Type your response here! ] Exercise 2 is a quality cost analysis assignment. It consists of two parts, each worth 5 points. Important Note: You must have completed Exercise 2A with a score of 3 points or better to qualify to earn credit for the Exercise 2B analysis. Exercise 2B: PAF Cost Analysis (5 Points). Using the solution to Exercise 2A provided below, you are to: 1) calculate the quality cost ratios and percentages for the calculations required on the 2nd page of this handout and 2) answer the two questions that follow. You are to type your responses in this form. Muncie Computer Corporation (MCC) Quality Cost Data Prevention Costs: 1. Plant Process Engineering $ 659,221 2. QMS Planning $ 304,552 3. Supplier Assessment (New Purchase Contracts) $ 265,952 4. Corporate Process Engineering $ 123,006 5. Operator Training and Certification $ 77,205 6. QMS Documentation $ 65,852 7. Design of Test Procedures $ 24,456 Total Prevention Cost $ 1,520,244 Appraisal Costs: 1. Supplier Monitoring (Existing Purchase Contracts) $ 117,308 2. Product Line 1 Inspection $ 59,225 3. Product Line 2 Inspection $ 47,337 4. Inspection and Test Setup $ 36,558 5. Receiving and Inspection $ 12,000 6. Laboratory Acceptance Testing $ 12,000 Total Appraisal Cost $ 284,428 Failure Costs: 1. Warranty Repairs $ 302,502 2. Lost Production (Labor Shortages) $ 252,366 3. Lost Production (Material Shortages) $ 106,223 4. Buffer Inventory Stocks $ 47,380 5. Customer Adjustments $ 31,995 6. Production Scrap $ 29,875 7. Corrective Maintenance to Machinery $ 23,855 Total Failure Cost $ 794,196 Total MCC Quality Cost: Total Quality Cost $ 2,598,868 In the table provided below, show all formula setups and solutions for the following required calculations. Make sure that you double-check your decimal places used and truncate all calculations appropriately. Follow the Exercise 1 solution if you don't know how to do this properly. Ratio of: Prevention to Failure Costs Appraisal to Failure Costs Prevention + Appraisal Costs to Failure Costs Proportion (%) of: Prevention to Total Quality Costs Appraisal to Total Quality Costs Failure to Total Quality Costs What is your interpretation of CMC's quality data? Are they doing well or poorly? Why? How do you know this? [Type your response here! ] What priority should be placed in addressing their quality costs? Make sure that you state clear reasons why? Note: You are to examine your quality costs in detail and provide specific cost recommendations. Generic descriptions such as lower failure costs are insufficient. Now that you know your specific costs and have ranked them for each category, what can and should the company do? [Type your response here! ]