Cover Design produces cell phone covers for all makes and models of cell phones. Cover Design sells 1,060,000 units each year at a price of $7 per unit and a contribution margin of 30%.

Prevention costs	$200,000
Appraisal costs	$90,000
Internal failure costs
Rework	$460,000
Scrap	$25,000
External failure costs
Product replacements	$317,000
Lost sales from customer returns	$790,000

CAD design improvement	$130,000
Machine calibration improvement to meet specifications	$130,400

Requirement If the improvements result in a 30% decrease in product replacement cost and a 40% decrease in customer returns, what is the impact on the overall COQ and thecompany's operating income? What should Cover Design do? Explain.

What is the impact on the overall COQ and the company's operating income? (Use parentheses or a minus sign for a net cost.)

	Amount
Benefits of quality improvements
Cost of making quality improvements	260,400
Net benefit (cost) of making quality improvements

I need assistance figuring out the benefits of quality improvement, the net benefit cost of making quality improvements, and the explanation. Thank you