Pareto Chart and Cost of Quality Report for a Manufacturing Company 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 result of the activity analysis is summarized as follows: Activities Activity Cost Correcting invoice errors $13,000 Disposing of incoming materials with poor quality 10,400 Disposing of scrap 31,200 Expediting late production 26,000 Final inspection 26,000 5,200 23,400 18,200 91,000 15,600 $260,000 Inspecting incoming materials Inspecting work in process Preventive machine maintenance Producing product Responding to customer quality complaints Total The production process is complicated by quality problems, requiring the production manager to expedite production and dispose of scrap. Required: 1. 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 Which activity appears first, in order from left to right? Producing product 2. 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.