Cost of quality The following production information about quality costs has been gathered for June: Total defective units 468 Number of units reworked 387 Number of units returned 55 Total prevention cost $17,940 Total appraisal cost $5,525 Per-unit profit for defective units $20 Per-unit profit for good units $55 Cost to rework defective units $18 Cost to handle returned units $14 Using these data, calculate the following: a. Total cost to rework $Answer b. Profit lost from not reworking all defective units $Answer c. Cost of processing customer returns $Answer d. Total failure costs $Answer e. Total quality cost $Answer
Cost of quality The following production information about quality costs has been gathered for June: Total defective units 468 Number of units reworked 387 Number of units returned 55 Total prevention cost $17,940 Total appraisal cost $5,525 Per-unit profit for defective units $20 Per-unit profit for good units $55 Cost to rework defective units $18 Cost to handle returned units $14 Using these data, calculate the following: a. Total cost to rework $Answer b. Profit lost from not reworking all defective units $Answer c. Cost of processing customer returns $Answer d. Total failure costs $Answer e. Total quality cost $Answer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cost of quality
The following production information about quality costs has been gathered for June:
| Total defective units | 468 |
| Number of units reworked | 387 |
| Number of units returned | 55 |
| Total prevention cost | $17,940 |
| Total appraisal cost | $5,525 |
| Per-unit profit for defective units | $20 |
| Per-unit profit for good units | $55 |
| Cost to rework defective units | $18 |
| Cost to handle returned units | $14 |
Using these data, calculate the following:
a. Total cost to rework $Answer
b. Profit lost from not reworking all defective units $Answer
c. Cost of processing customer returns $Answer
d. Total failure costs $Answer
e. Total quality cost $Answer
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