Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Metropolitan Manufacturing expects to spend $400,000 in 20X6 in appraisal costs change its incoming materials inspection method. If it decides to implement a method, it
Metropolitan Manufacturing expects to spend $400,000 in 20X6 in appraisal costs change its incoming materials inspection method. If it decides to implement a method, it will save $40,000 in fixed appraisal costs and variable costs of $0. finished product. The new method involves $60,000 in training costs and an additi in annual equipment rental. It takes two units of material for each finished product. Internal failure costs average $80 per failed unit of finished goods. During 207 completed items had to be reworked. External failure costs average $200 per fa company's average external failures are 1% of units sold. The company carri inventories, because all jobs are on a per order basis and a just-in-time inventory or is used. How much will external failure costs change assuming 800,000 units of materials ar that product failures with customers are cut in half with the new receiving method? Selected Answer: $400,000 decrease
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started