The administrator of elections for the city of Sweetwater has been asked to perform an activity analysis of its optical scanning center. The optical scanning center reads voter forms into the computer. The result of the activity analysis is summarized as follows:

Activities Activity Cost

Correcting errors identified by election commission .....$ 96,000

Correcting jams ....................84,000

Correcting scan errors ................48,000

Loading .......................24,000

Logging-in control codes (for later reconciliation) .....18,000

Program scanner ...................24,000

Rerunning job due to scan reading errors ..........22,000

Scanning ......................52,000

Verifying scan accuracy via reconciling totals .........20,000

Verifying scanner accuracy with test run ...........12,000

Total ......................$400,000

Instructions

1. Prepare a Pareto chart of the department activities.

2. Use the activity cost information to determine the percentages of total department costs that are prevention, appraisal, internal failure, external failure, and not costs of quality. Round percentages to one decimal place.

3. Determine the percentages of the total department costs that are value- and non-value- added. Round percentages to one decimal place.

4. Interpret the information.