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Need help with A, B & C. During its first year of operations, Ridenour Company produced 59,700 electronic tablets. Of total production, 1,500 were found
Need help with A, B & C.
During its first year of operations, Ridenour Company produced 59,700 electronic tablets. Of total production, 1,500 were found defective by quality appraisers. Six hundred of the defective units were reworked and sold through regular channels at the original price; the rest were sold as seconds without rework. (The uncorrected defect did not pose a hazard to customers.) The electronic tablets are sold with a two-year warranty; seconds have a six-month warranty. Ridenour Company spent $675,000 for prevention measures and $294,000 on appraisal. Following is the firm's income statement, which appropriately does not reflect any income taxes: Regular units sold totaled 59,100 and units of seconds sold totaled 600 . Rework units sold totaled 900. a. Compute the total profit lost by Ridenour Company in its first year of operation by selling defective units as seconds rather than reworking them and selling them at the regular price. s b. Compute the company's total failure cost for the year. \$ c. Compute the company's total quality cost for the year. $
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