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Meagher Solutions Inc, manufactures memory chips for personal computers. An activity analysis was conducted, and the following activity costs were identified with t manufacture and
Meagher Solutions Inc, manufactures memory chips for personal computers. An activity analysis was conducted, and the following activity costs were identified with t manufacture and sale of memory chips: a. Identify the cost of quality classification for each activity. Quality Activities Activity Cost Quality Cost Classification Correct shipment errors $150,000 Disposing of scrap 95,000 Emergency equipment maintenance 125,000 Employee training 50,000 Final inspection 80,000 Inspecting incoming materials 60,000 Preventive equipment maintenance 40,000 Processing customer returns 90,000 Scrap reporting 45,000 Supplier development 15,000 250,000 Warranty claims Total $1,000,000 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 Quality Report Inspecting incoming materials 60,000 Preventive equipment maintenance 40,000 Processing customer returns i 90,000 Scrap reporting 45,000 Supplier development 15,000 Warranty claims 250,000 Total $1,000,000 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 Quality Report Quality Cost Percent of Quality Cost Percent of Total Quality Cost Classification Total Sales Prevention % % Appraisal % Internal fallure % % External failure % Total c. The category with the fewest number of quality activities is highest single cost is warranty claims, which is a(n)) The Nearly fifty percent of the quality activity costs are Disposing of scrap, emergency equipment maintenance, and scrap reporting are all
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