Three-way molding joint

[slownsteady]

I'm sprucing up the laundry room a little bit. Around the ceiling there is a shoe molding, and I want to add a quarter-round in the vertical corners of the room. So what do I do where the the mitered corners of the shoe intersect with the top of the qtr-round?

And, while I'm askin', what do you guys recommend for filler where the molding isn't snug against the wall (as can happen when the wall is a little wavy)? Wood putty, caulk, or drywall mud? Or something else?

 

[Snoonyb]

Cope the 1/4rnd. to the profile and painters caulk.

 

[nealtw]

Lots of caulk.