Silicon Solutions Inc. manufactures RAM memory chips forpersonal computers. An activity analysis was conducted, and thefollowing activity costs were identified with the manufacture andsale of memory chips:
1
Activities
Activity Cost
2
Correct shipment errors
$144,000.00
3
Disposing of scrap
90,000.00
4
Emergency equipment maintenance
99,000.00
5
Employee training
36,000.00
6
Final inspection
81,000.00
7
Inspecting incoming materials
54,000.00
8
Preventive equipment maintenance
27,000.00
9
Processing customer returns
90,000.00
10
Scrap reporting
36,000.00
11
Supplier development
9,000.00
12
Warranty claims
234,000.00
13
Total
$900,000.00
Required:
Identify the cost of quality classification for eachactivity.
Prepare a cost of quality report. Assume sales for theperiod were $3,000,000.Refer to the Quality Cost Classificationslist provided for the exact wording of the answer choices for textentries. Round percents to one decimal place.
Interpret the cost of quality report.
Silicon Solutions Inc. manufactures RAM memory chips forpersonal computers. An activity analysis was conducted, and thefollowing activity costs were identified with the manufacture andsale of memory chips:
1 | Activities | Activity Cost |
2 | Correct shipment errors | $144,000.00 |
3 | Disposing of scrap | 90,000.00 |
4 | Emergency equipment maintenance | 99,000.00 |
5 | Employee training | 36,000.00 |
6 | Final inspection | 81,000.00 |
7 | Inspecting incoming materials | 54,000.00 |
8 | Preventive equipment maintenance | 27,000.00 |
9 | Processing customer returns | 90,000.00 |
10 | Scrap reporting | 36,000.00 |
11 | Supplier development | 9,000.00 |
12 | Warranty claims | 234,000.00 |
13 | Total | $900,000.00 |
Required: |
|---|
Identify the cost of quality classification for eachactivity. |
Prepare a cost of quality report. Assume sales for theperiod were $3,000,000.Refer to the Quality Cost Classificationslist provided for the exact wording of the answer choices for textentries. Round percents to one decimal place. |
Interpret the cost of quality report. |
Related questions
Cost of Quality Report
Meagher Solutions Inc. manufactures memory chips for personalcomputers. An activity analysis was conducted, and the followingactivity costs were identified with the manufacture and sale ofmemory chips:
a. Identify the cost of quality classificationfor 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. Assumethat the sales for the period were $4,000,000. If required, roundpercents to one decimal place.
| Meagher Solutions Inc. | |||
| Costof Quality Report | |||
| Quality Cost Classification | Quality Cost | Percent of Total Quality Cost | Percent of Total Sales |
| Prevention | $ | % | % |
| Appraisal | % | % | |
| Internal failure | % | % | |
| External failure | % | % | |
| Total | $ | % | % |
c. The category with the fewest number ofquality activities is . Nearly fifty percent of the qualityactivity costs are . The highest single cost is warranty claims,which is a(n) . Disposing of scrap, emergency equipmentmaintenance, and scrap reporting are all .
