Classify the activities into prevention, appraisal, internal failure, external failure, and not costs of quality (producing product). Classify the activities into value-added and non-value added activities.

Activity	Activity Cost		Cost of Quality Classification	VA/NVA
Correcting invoice errors	$13,840		External failure Appraisal External failure Internal failure Not a quality cost Prevention	Non-value-added Non-value-added Value-added
Disposing of incoming materials with poor quality	10,380		Internal failure Appraisal External failure Internal failure Not a quality cost Prevention	Non-value-added Non-value-added Value-added
Disposing of scrap	51,900		Internal failure Appraisal External failure Internal failure Not a quality cost Prevention	Non-value-added Non-value-added Value-added
Expediting late production	44,980		Internal failure Appraisal External failure Internal failure Not a quality cost Prevention	Non-value-added Non-value-added Value-added
Final inspection	27,680		Appraisal Appraisal External failure Internal failure Not a quality cost Prevention	Value-added Non-value-added Value-added
Inspecting incoming materials	6,920		Appraisal Appraisal External failure Internal failure Not a quality cost Prevention	Value-added Non-value-added Value-added
Inspecting work in process	34,600		Appraisal Appraisal External failure Internal failure Not a quality cost Prevention	Value-added Non-value-added Value-added
Preventive machine maintenance	24,220		Prevention Appraisal External failure Internal failure Not a quality cost Prevention	Value-added Non-value-added Value-added
Producing product	110,720		Not a quality cost Appraisal External failure Internal failure Not a quality cost Prevention	Value-added Non-value-added Value-added
Responding to customer quality complaints	20,760		External failure Appraisal External failure Internal failure Not a quality cost Prevention	Non-value-added Non-value-added Value-added
Total	$346,000

2. On paper or in a spreadsheet program, prepare a Pareto chart for each of the activities listed above. Answer the following:

What type of chart is a Pareto chart? Bar chart

• Bar chart
• Line chart
• Organization chart
• Pie chart

Which activity appears first, in order from left to right? Producing product

• Disposing of scrap
• Correcting invoice errors
• Expediting late production
• Inspecting work in process
• Producing product

3. Use the activity cost information to determine the percentages of total department costs that are prevention, appraisal, internal failure, external failure, and not The cost associated with controlling quality (prevention and appraisal) and failing to control quality (internal and external failure)costs of quality. If required, round percentages to one decimal place.

Quality Cost Classification	Activity Cost			Percent of Total Department Cost
Prevention	$			%
Appraisal				%
Internal failure				%
External failure				%
Not a cost of quality				%
Total	$			%

4. Determine the percentages of total department costs that are value-added and non-value-added. If required, round percentages to one decimal place.

	Activity Cost			Percent of Total Department Cost
Value-added	$			%
Non-value-added				%
Total	$			%