Ryser, Inc., produces and sells computer accessories. After 18 months of declining sales, Rysers board of directors hired a new CEO to review the problem and make changes to the company.

Upon investigation, the new CEO found that the products of Ryser are brilliantly designed. However, the manufacturing process has been neglected, which leads to unsatisfactory product quality and product returns. To address the problem, the new CEO proposed the following actions:

1. Conduct a thorough quality audit of the existing quality control program
2. Use better software to improve the accuracy of the statistical program
3. Purchase new testing equipment
4. Conduct a quality screening and evaluation of suppliers

The new CEO also set financial targets by referencing the quality control report of the industry leader in product quality. Rysers quality control report and that of the industry leader are presented below.

	Costs
	Ryser		Industry Leader
Rework	$ 62,400		$ 66,000
Product redesign	135,200		99,000
Process improvement	52,000		198,000
Testing	26,000		92,400
Product rejection	52,000		39,600
Downtime	104,000		52,800
Statistical process control	36,400		118,800
Supplier evaluation	41,600		99,000
Inspection	57,200		105,600
Warranty	208,000		112,200
Product liability claim	156,000		92,400
Total production costs	$5,200,000		$ 66,000
Sales	7,429,000		9,429,000

1. Classify each proposed activity into the cost of quality category that the activity most directly affects.

2. Identify and describe the technique the new CEO used when referencing the quality control report of the industry leader.

3. Propose two other applications of the technique identified in Question 2.

4. If the new CEO wants to adjust the conformance and nonconformance costs shown in its quality control report such that the cost of each category as a percentage of total production cost is equal to that of the industry leader, what should be the adjustment of the cost of each category?

*****I NEED ANSWER FOR "D."*****