A customer requests certain sophisticated tests on equipment he purchased from your factory. Such tests are very

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A customer requests certain sophisticated tests on equipment he purchased from your factory. Such tests are very expensive and must be performed by a third party. The equipment meets all of the industry standards but shows anomalies which cannot be explained. Though the problem appears to be minor, you decide to inspect the unit to try to understand the test data—a very expensive and time-consuming process. You inform the customer of this decision. A problem is found, but it is minor and highly unlikely ever to cause the unit to fail. Rebuilding the equipment would be very expensive and time-consuming; moreover, notifying the customer that you are planning to rebuild the unit would also put your overall manufacturing procedures in question. What should you do: fix it, ship it, or inform the customer?

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Managerial Accounting For Undergraduates

ISBN: 9780357499948

2nd Edition

Authors: James Wallace, Scott Hobson, Theodore Christensen

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