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Meagher 5olutions Inc. manufactures memory chips for personal computers. An activity analysis was conducted, and the following acivity costs were identified with the manufacture and
Meagher 5olutions Inc. manufactures memory chips for personal computers. An activity analysis was conducted, and the following acivity costs were identified with the manufacture and sale of memory chips a. Identify the cost of quality classification for each activity. Quality Activities Correct shipment errors Disposing of scrap Activity Cost $150,000 95,000 125,000 Quality Cost Classification External failurev Internal failure Internal failurev 50,000 vetion v Employee training Final Inspection Inspecting incoming materials Appraisal Processing customer retums Scrap reporting Supplier development Warranty claims 60,000 Appralsal v 40.000 evention 90,000 External failure 45,000 Internal failure v 15,000 Prevention 250,000 External failure v Tatal $1,000,000 Feedback b. Prepare a cost of quality report. Assume that the sales for the period were $4,000,000. If required, round percents to one decimal place. Meagher Solutions Inc. Cost of Quali Quality Cost Cassification Qualty Cost Percent of Total Quaity Cost Percent of Total Sales 230.000) x | 25% x 23 % x Appraisal Intemal falure Extermal falure 29X Total
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