, Inc., is using acosts-of-quality approach to evaluate design engineering efforts for a new skateboard. Sherrisenior managers expect the engineering work to reduceappraisal, internalfailure, and external failure activities. The predicted reductions in activities over the2-year life of the skateboards follow. Also shown are the cost allocation rates for each activity. LOADING... (Click the icon to view theinformation.) DATA TABLE

Predicted	ActivityCost
Reductionin	AllocationRate
Activity	ActivityUnits	PerUnit
Inspectionofincomingmaterials	395	$45
Inspectionoffinishedgoods	395	19
Numberofdefectiveunits
discoveredin-house	1,400	56
Numberofdefectiveunits
discoveredbycustomers	300	69
Lostsalestodissatisfiedcustomers	125	98

1.	Calculate the predicted quality cost savings from the design engineering work.
2.	Sherrispent $105,000 on design engineering for the new skateboard. What is the net benefit of this"preventive" qualityactivity?
3.	What major difficulty would Sherri's managers have in implementing thiscosts-of-quality approach? What alternative approach could they use to measure qualityimprovement?

Requirement 1. Calculate the predicted quality cost savings from the design engineering work. The predictive quality cost savings from the design engineering work is $nothing. Requirement 2. Sherri spent $105,000 on design engineering for the new skateboard. What is the net benefit of this"preventive" qualityactivity? The net benefit of the"preventive" quality activity is $nothing. Requirement 3. What major difficulty would Sherri's managers have in implementing thiscosts-of-quality approach? . What alternative approach could they use to measure qualityimprovement? Focus only on financial measures of quality. Monitor competitors' measures of quality and continuously try to improve them. Monitor nonfinancial measures of quality and continuously try to improve them. Enter your answer in each of the answer boxes.

1.