BikeSafe Company inadvertently produced 4,500 defective bike helmets. The helmets cost $10 each to be manufactured. A salvage company will purchase the defective units as they are for $8 each. The production manager reports that the defects can be corrected for $8 per unit, enabling the company to sell them at the regular price of $15.00. The repair operations would not affect other production operations.

Required: Complete the following showing as much work as possible and clearly labeling final answers.

a. Prepare a quantitative analysis that shows which action should be taken and provide your recommendation based on this analysis.

b. Explain 2 qualitative factors that may contradict the results from the quantitative analysis from part (a) above that the company should consider when making this specific decision.