Cost of Quality Report

A quality control activity analysis indicated the following four activity costs of a hotel:

Inspecting cleanliness of rooms	$142,800
Processing lost customer reservations	285,600
Rework incorrectly prepared room service meal	214,200
Employee training	71,400
Total	$714,000

Sales are $4,200,000. Prepare a cost of quality report. Round percent of sales to one decimal place.

Cost of Quality Report
Quality Cost Classification	Quality Cost	Percent of Total Quality Cost	Percent of Total Sales
Prevention	$	%	%
Appraisal		%	%
Internal failure		%	%
External failure		%	%
Total	$	%	%

2)

Process Activity Analysis

Roen Company incurred an activity cost of $105,600 for inspecting 40,000 units of production. Management determined that the inspecting objectives could be met without inspecting every unit. Therefore, rather than inspecting 40,000 units of production, the inspection activity was limited to a random selection of 5,000 units out of the 40,000 units of production.

Determine the inspection activity cost per unit on 40,000 units of total production both before and after the improvement. If required, round per unit amounts to the nearest cent.

Inspection activity before improvement	$	per unit
Inspection activity after improvement	$	per unit