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Part 2 Reading Inc. Produces tablets. Below is production information: 800 tablets Of the defective units these were reworked and sold through normal process and
Part 2 Reading Inc. Produces tablets. Below is production information: 800 tablets Of the defective units these were reworked and sold through normal process and original sales price 40200 Tablets Produced Of the total produced: 1,000 tablets Defective by quality appraisers 200 tablets Sold as is as seconds without rework Tablets are sold with a 2-year warranty. Seconds have a 6-month warranty. The company spent the following on these quality costs: $40,000 Prevention cost $200,000 ' Appraisal cost Total Selling and Administrative Expenses are all fixed costs 2,000,000 Included in the Total selling and administrative expenses is Below is the Income statement: Reading Inc. Income Statement For year ended December 31 Regqular sales 14,000,000 Sales of Seconds 60,000 14,060,000 Cost of Goods sold: Original production costs 3,200,000 Rework costs 24,000 Prevention and appraisal costs 240,000 3,464,000 Gross margin 10,596,000 Selling and Administrative expenses 2,000,000 Income before taxes 8,596,000 - Required: Show your work by providing labels and cell referencing, so I can determine how you are coming up with the answer. . 1. Compute the total profit lost by Reading Inc. by selling defective units as seconds rather than reworking them and selling them at regular price. +2. Compute the company's total internal failure cost for the year. .3. Compute the company's total external failure cost for the year. $400,000 Cost of customer complaint center
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