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eBook The president of Mission Inc, has been concerned about the growth in costs over the last several years. The president asked the controller to
eBook The president of Mission Inc, has been concerned about the growth in costs over the last several years. The president asked the controller to perform an activity analysis to gain a better insight into these costs. The activity analysis revealed the following The production process is complicated by quality problems, requiring the production manager to expedite production and dispose of scrap. Required Calculator 1. 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. Cost of Quality Classification Activity Activity Cost VA/NVA $7,500 Externat faiture Non-value added 15,000 Intermat tature Non-value-added v 27,500 Internat lalureNon-value-added 22,50 Internat taiture Non-vatue-added v 20,000 Appraisal V 5,000 Appraisal 25,000 Appraisal v 15,000 Prevention v 97,500 Not a quality costValue-added 15,000 External faiture Non-value-added Correcting invoice errors Disposing of incoming materials with poor quality Disposing of scrap KExpediting late production Final inspection Inspecting incoming materials Inspecting work in process Preventive machine maintenance Producing product Responding to customer quality complaints Value-added Value-added Value-added v Value-added V $250,000 Total 4:35 PM 4/25/2018 ^ DOLL
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