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: Required: 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 Activity Activity Cost VA/NVA Classification Correcting invoice errors Disposing of incoming materials with poor quality Disposing of scrap Expediting late production $12,350 9,270 46,350 40,170 24,720 Final Inspection Inspecting incoming materials 6,180 Inspecting work in process 27,810 Preventive machine maintenance 21,630 Producing product Responding to customer quality complaints 101.970 18,540 3309,000 Total 2. 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? Which activity appears first, in order from left to right? 3. Use the activity cost information to determine the percentages of total department costs that are prevention, appraisal, internal failure, external failure, and not costs of quality. If required, round percentages to one decimal place Quality Cost Percent of Total Classification Activity Cost Department Cost Prevention Appraisal Internal failure External failure Not a cost of quality Total 4. Determine the percentages of total department costs that are value-added and non-value-added. If required, round percentages to one decimal place. Percent of Total Activity Cost Department Cost Value-added Non-value-added Total 5. The department has 41% of its total costs as opportunity for cost savings. costs represent 31% of the total costs. This means there is costs represent 10% of the total department costs