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Please help with questions 3 and 4 thank you Pareto Chart and Cost of Quality Report for a Manufacturing Company The president of Mission Inc.
Please help with questions 3 and 4 thank you
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 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: 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. Activity Activity Cost Cost of Quality Classification VA/NVA Correcting invoice errors $7,500 External failure Non-value-added Disposing of incoming materials with poor quality 15,000 Internal failure Non-value-added Disposing of scrap 27,500 Internal failure Non-value-added Expediting late production 22,500 Internal failure Non-value-added Final inspection 20,000 Appraisal Value-added Inspecting incoming materials 5,000 Appraisal e-added Inspecting work in process 25,000 Appraisal Value-added Preventive machine maintenance 15,000 Prevention Value-added Producing product 97,500 Not a quality cost Value-added Responding to customer quality complaints 15,000 External failure Non-value-added Total $250,000 3. Use the activity cost information to determine the percentages of total costs that are prevention, appraisal, internal failure, external failure, and not costs of quality (producing product). Quality Cost Classification Activity Cost Percent of Total Department Cost Prevention 14,700 x 7 X % Appraisal % Internal failure % External failure % Not a cost of quality % Total % 4. Determine the percentages of total costs that are value- and non-value-added. Activity Cost Percent of Total Department Cost Value-added $ % Non-value-added % Total % 5. The company has 65% of its total costs as costs represent 26% of the total costs. costs are 9% of the total. There is only one activity classified as a(n) costStep by Step Solution
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