40, 40 1:130.10KB/s57Sneaky Snacky Squirrel Inc. has a budgetof $900,000 in 2021 for prevention costs. If itdecides to automate a portion of its preventionactivities, it will save $80,000 in variable costs.The new method will require $40,000 in trainingcosts and $100,000 in annual equipment costs.Management is willing to adjust the budget foran amount up to the cost of the new equipment.The budgeted production level is 150,000 units.Appraisal costs for the year are budgeted at$600,000. The new prevention procedures willsave appraisal costs of $50,000. Internal failurecosts average $15 per failed unit of finishedgoods. The internal failure rate is expected tobe 3% of all completed items. The proposedchanges will cut the internal failure rate byone-third. Internal failure units are destroyed.External failure costs average $54 per failedunit. The company's average external failuresaverage 3% of units sold. The new proposalwill reduce this rate by 50%. Assume all unitsproduced are sold and there are no endinginventories.III Question:-How much do external failure costs changeif all changes are as anticipated with the newprevention procedures? Assume all unitsproduced are sold and there are no endinginventories

External failure costs refers to the component of the cost of quality as well as are incurred when…

Sneaky Snacky Squirrel Inc. has a budget of $900,000 in 2021 for prevention costs. If it decides to automate a portion of its prevention activities, it will save $80,000 in variable costs. The noW mothod will roquire $M0.000 in troinin

Sneaky Snacky Squirrel Inc. has a budget of $900,000 in 2021 for prevention costs. If it decides to automate a portion of its prevention activities, it will save $80,000 in variable costs. The noW mothod will roquire $M0.000 in troinin

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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