Distribution Center 1: Finished goods stocks of 30,500 lots for Apple with 2% electrical failure per lot and 25,600 lots for Samsung with 3.1% mechanical damage per lot. Distribution Center 2: Finished goods stocks of 27,500 lots for Apple with 1.78% electrical failure per lot and 34,500 lots for Samsung with 2.8% mechanical damage per lot The finished goods for Apple came from Site A with standard quantity per lot at 2,255 and finished goods for Samsung came from Site B with standard quantity per lot at 2,534 How much is internal failure cost if the manufacturing cost per unit for Apple is $1.85 and Samsung cost per unit at $1.25 a b. Assuming the finished goods were accidentally shipped to customers without knowing the quality issue, how much is the external failure cost if the selling price per unit for Apple product is $2.5 and it agreed with Philips that will only accept 500 defects per million units and at the same time the Samsung product selling price is at $2.10 per unit and will only accept 2500 defects per million units
Distribution Center 1: Finished goods stocks of 30,500 lots for Apple with 2% electrical failure per lot and 25,600 lots for Samsung with 3.1% mechanical damage per lot. Distribution Center 2: Finished goods stocks of 27,500 lots for Apple with 1.78% electrical failure per lot and 34,500 lots for Samsung with 2.8% mechanical damage per lot The finished goods for Apple came from Site A with standard quantity per lot at 2,255 and finished goods for Samsung came from Site B with standard quantity per lot at 2,534 How much is internal failure cost if the manufacturing cost per unit for Apple is $1.85 and Samsung cost per unit at $1.25 a b. Assuming the finished goods were accidentally shipped to customers without knowing the quality issue, how much is the external failure cost if the selling price per unit for Apple product is $2.5 and it agreed with Philips that will only accept 500 defects per million units and at the same time the Samsung product selling price is at $2.10 per unit and will only accept 2500 defects per million units
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter14: Quality And Environmental Cost Management
Section: Chapter Questions
Problem 2CE
Related questions
Question
![The director of Quality and Reliability department of Philips Semiconductor had received quality issue report from the incoming quality inspection of distribution centers. Below is given data:
Distribution Center 1:
Finished goods stocks of 30,500 lots for Apple with 2% electrical failure per lot and 25,600 lots for Samsung with 3.1% mechanical damage per lot.
Distribution Center 2:
Finished goods stocks of 27,500 lots for Apple with 1.78% electrical failure per lot and 34,500 lots for Samsung with 2.8% mechanical damage per lot
The finished goods for Apple came from Site A with standard quantity per lot at 2,255 and finished goods for Samsung came from Site B with standard quantity per lot at 2,534
How much is internal failure cost if the manufacturing cost per unit for Apple is $1.85 and
Samsung cost per unit at $1.25
a.
b. Assuming the finished goods were accidentally shipped to customers without knowing the
quality issue, how much is the external failure cost if the selling price per unit for Apple
product is $2.5 and it agreed with Philips that will only accept 500 defects per million units
and at the same time the Samsung product selling price is at $2.10 per unit and will only
accept 2500 defects per million units](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F49f31c26-1385-420b-8728-09f19c51484a%2Fc92bbc3e-ed64-4a3d-9143-845504d14f1f%2F4ge3ka5_processed.png&w=3840&q=75)
Transcribed Image Text:The director of Quality and Reliability department of Philips Semiconductor had received quality issue report from the incoming quality inspection of distribution centers. Below is given data:
Distribution Center 1:
Finished goods stocks of 30,500 lots for Apple with 2% electrical failure per lot and 25,600 lots for Samsung with 3.1% mechanical damage per lot.
Distribution Center 2:
Finished goods stocks of 27,500 lots for Apple with 1.78% electrical failure per lot and 34,500 lots for Samsung with 2.8% mechanical damage per lot
The finished goods for Apple came from Site A with standard quantity per lot at 2,255 and finished goods for Samsung came from Site B with standard quantity per lot at 2,534
How much is internal failure cost if the manufacturing cost per unit for Apple is $1.85 and
Samsung cost per unit at $1.25
a.
b. Assuming the finished goods were accidentally shipped to customers without knowing the
quality issue, how much is the external failure cost if the selling price per unit for Apple
product is $2.5 and it agreed with Philips that will only accept 500 defects per million units
and at the same time the Samsung product selling price is at $2.10 per unit and will only
accept 2500 defects per million units
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