Need help with calaculation for the two contributions:

20-30 Quality improvement, relevant costs, and relevant revenues. The Brady Corporation sells 375,000 V262 valves to the automobile and truck industry. Brady has a capacity of 210,000 machine-hours and can produce two valves per machine-hour. V262's contribution margin per unit is $9. Brady sells only 375,000 valves because 45,000 valves (12% of the good valves) need to be reworked. It takes one machine-hour to rework two valves, so 22,500 hours of capacity are used in the rework process. Brady's rework costs are $315,000. Rework costs consist of the following: Direct materials and direct rework labor (variable costs): $3 per unit Fixed costs of equipment, rent, and overhead allocation: $4 per unit Brady's process designers have developed a modification that would maintain the speed of the process and ensure 100% quality and no rework. The new process would cost $523,000 per year. The following additional information is available: The demand for Brady's V262 valves is 440,000 per year. The Mason Corporation has asked Brady to supply 19,000 T971 valves (another product) if Brady implements the new design. The contribution margin per T971 valve is $9. Brady can make one T971 valve per machine-hour with 100% quality and no rework. Required: 1. Suppose Brady's designers implement the new design. Should Brady accept Mason's order for 19,000 T971 valves? Show your calculations. 2. Should Brady implement the new design? Show your calculations. 3. What nonfinancial and qualitative factors should Brady consider in deciding whether to implement the new design? SOLUTION (30 min.) Quality improvement, relevant costs, and relevant revenues. One way to present the alternatives is via a decision tree, as shown below. MakeT971

One way to present the alternatives is via a decision tree. as shown below. Make T971 Implement Do not make T971 Do not implement new design