Silicon Solutions Inc. manufactures RAM memory chips for personal computers. An activity analysis was conducted, and the following activity costs were identified with the 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		$144,000			External failure
Disposing of scrap		90,000			Internal failure
Emergency equipment maintenance		99,000			Internal failure
Employee training		36,000			Prevention
Final inspection		81,000			Appraisal
Inspecting incoming materials		54,000			Appraisal
Preventive equipment maintenance		27,000			Prevention
Processing customer returns		90,000			External failure
Scrap reporting		36,000			Internal failure
Supplier development		9,000			Prevention
Warranty claims		234,000			External failure
Total		$900,000

b. Prepare a cost of quality report. Assume that the sales for the period were $3,000,000. If required, round percents to one decimal place.

Silicon Solutions Inc.
Cost of Quality Report
Quality Cost Classification	Quality Cost	Percent of Total Quality Cost	Percent of Total Sales
Prevention	$	%	%
Appraisal		%	%
Internal failure		%	%
External failure		%	%
Total	$	%	%