Czinn Industries makes refrigerators with the following results in 2021: Units manufactured and sold 10,000 $2,000 $1,200 6,000 0.5 Selling price Variable cost per unit Hours spent on design Testing and inspection hours per unit Percentage of units reworked in plant Rework costs per unit Percentage of units repaired at customer site Repair costs per unit Estimated lost sales from poor quality (units) 5% $500 4% $600 300 The labor rate in Design is $75 per hour; the labor rate in Testing & Inspection is $40 per hour. 1. External failure costs =$ 2. Internal failure costs = $ 3. Prevention costs = $ 4. Appraisal costs = $ %3D

Czinn Industries makes refrigerators with the following results in 2021: Units manufactured and sold 10,000 $2,000 $1,200 6,000 0.5 Selling price Variable cost per unit Hours spent on design Testing and inspection hours per unit Percentage of units reworked in plant Rework costs per unit Percentage of units repaired at customer site Repair costs per unit Estimated lost sales from poor quality (units) 5% $500 4% $600 300 The labor rate in Design is $75 per hour; the labor rate in Testing & Inspection is $40 per hour. 1. External failure costs =$ 2. Internal failure costs = $ 3. Prevention costs = $ 4. Appraisal costs = $ %3D

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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Question

Czinn Industries makes refrigerators with the following results in 2021:
Units manufactured and sold
10,000
$2,000
$1,200
6,000
0.5
Selling price
Variable cost per unit
Hours spent on design
Testing and inspection hours per unit
Percentage of units reworked in plant
Rework costs per unit
Percentage of units repaired at customer site
Repair costs per unit
Estimated lost sales from poor quality (units)
5%
$500
4%
$600
300
The labor rate in Design is $75 per hour; the labor rate in Testing & Inspection is $40 per hour.
1. External failure costs = $
2. Internal failure costs = $
3. Prevention costs = $
4. Appraisal costs = $

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