Cost of Quality Report 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 Activity Cost   Quality Cost Classification 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 $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 $fill in the blank d42036041fe1fae_1 fill in the blank d42036041fe1fae_2% fill in the blank d42036041fe1fae_3% Appraisal fill in the blank d42036041fe1fae_4 fill in the blank d42036041fe1fae_5% fill in the blank d42036041fe1fae_6% Internal failure fill in the blank d42036041fe1fae_7 fill in the blank d42036041fe1fae_8% fill in the blank d42036041fe1fae_9% External failure fill in the blank d42036041fe1fae_10 fill in the blank d42036041fe1fae_11% fill in the blank d42036041fe1fae_12% Total $fill in the blank d42036041fe1fae_13 fill in the blank d42036041fe1fae_14% fill in the blank d42036041fe1fae_15% c.  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  .

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Chapter1: Financial Statements And Business Decisions
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  1. Cost of Quality Report

    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 Activity Cost   Quality Cost Classification
    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 $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 $fill in the blank d42036041fe1fae_1 fill in the blank d42036041fe1fae_2% fill in the blank d42036041fe1fae_3%
    Appraisal fill in the blank d42036041fe1fae_4 fill in the blank d42036041fe1fae_5% fill in the blank d42036041fe1fae_6%
    Internal failure fill in the blank d42036041fe1fae_7 fill in the blank d42036041fe1fae_8% fill in the blank d42036041fe1fae_9%
    External failure fill in the blank d42036041fe1fae_10 fill in the blank d42036041fe1fae_11% fill in the blank d42036041fe1fae_12%
    Total $fill in the blank d42036041fe1fae_13 fill in the blank d42036041fe1fae_14% fill in the blank d42036041fe1fae_15%

    c.  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  .

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