The following data is from Star Production Systems:

Activity Activity Cost

Correcting invoice errors 10,000

Disposing of poor-quality incoming materials. 15,000

Disposing of scrap 28,000

Final inspections 25,000

Responding to customer complaints 15,000

Inspecting incoming materials 17,500

Preventative machine maintenance 15,000

Warranty work 25,000

As a recent business graduate (with a special love for accounting), Star Production has asked you to analyze their activity costs and make recommendations for improvement. Using the data above, create a Cost of Quality Report and suggest activity areas that should be investigated further by the company. Assume that they are not experts in the difference between good costs of quality and bad costs of quality and you should include a distinction between the two in your report.