**Activity Analysis and Cost of Quality Report for Meagher Solutions Inc.**Meagher Solutions Inc. manufactures 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 and Their Associated Costs:** - Correct shipment errors: $150,000 - Disposing of scrap: $95,000 - Emergency equipment maintenance: $125,000 - Employee training: $50,000 - Final inspection: $80,000 - Inspecting incoming materials: $60,000 - Preventive equipment maintenance: $40,000 - Processing customer returns: $90,000 - Scrap reporting: $45,000 - Supplier development: $15,000 - Warranty claims: $250,000- **Total Activity Costs:** $1,000,000---b. **Prepare a Cost of Quality Report**Assume that the sales for the period were $4,000,000. If required, round percents to one decimal place.- **Meagher 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** | | **%** | **%** |---c. **Analysis of Cost Categories:**- The category with the fewest number of quality activities is __________.- Nearly fifty percent of the quality activity costs are __________.- The highest single cost is warranty claims, which is a(n) __________.- Disposing of scrap, emergency equipment maintenance, and scrap reporting are all __________.This analysis helps in understanding the distribution and impact of different quality-related activities on the overall manufacturing process and financial outcomes.

Types of quality control and classification costs are enumerated as below: 1. Internal Faiure 2.…

Meagher Solutions Inc. manufactures 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 Correct shipment errors Disposing of scrap Emergency equipment maintenance Employee training Final inspection Inspecting incoming materials Preventive equipment maintenance Processing customer returns Scrap reporting Activity Cost $150,000 95,000 125,000 50,000 80,000 60,000 40,000 90,000 45,000 Quality Cost Classification

Meagher Solutions Inc. manufactures 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 Correct shipment errors Disposing of scrap Emergency equipment maintenance Employee training Final inspection Inspecting incoming materials Preventive equipment maintenance Processing customer returns Scrap reporting Activity Cost $150,000 95,000 125,000 50,000 80,000 60,000 40,000 90,000 45,000 Quality Cost Classification

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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