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The call center of Wobegon Electric Company handles 1.13 million calls per year. The average call requires six minutes of operator time, and 40
The call center of Wobegon Electric Company handles 1.13 million calls per year. The average call requires six minutes of operator time, and 40 percent of the calls require a supervisor to be involved for at least half of the call time. Operators are paid $9 per hour, and supervisors are paid $15 per hour. After Wobegon Electric engaged in process benchmarking, call times were reduced by one minute, and the number of supervisor-involved calls were reduced by 15 percent. The benchmarking study cost Wobegon Electric Company $188,000. a. What was Wobegon Electric's total labor cost and labor cost per call at the call center prior to benchmarking? $ Total labor cost Labor cost per call $ 0 0 b. What was Wobegon Electric's total labor cost and labor cost per call at the call center after benchmarking? Note: Do not round until your final answer. Note: Round the labor cost per call to two decimal places (i.e., round 3.4555 to 3.46). $ Total labor cost Labor cost per call $ 0 0 c. If the new results are expected to continue for three years, was engaging in the benchmarking study profitable to Wobegon Electric Company? Benchmarking study resulted in a $ 0 Net savings The following production information about quality costs has been gathered for June: Total defective units 864 Number of units reworked 714 Number of units returned 102 Total prevention cost $33,120 Total appraisal cost $10,200 Per-unit profit for defective units $20 Per-unit profit for good units $55 Cost to rework defective units $18 Cost to handle returned units $14 Using these data, calculate the following: a. Total cost to rework $ 12,852 b. Profit lost from not reworking all defective units $ 0 c. Cost of processing customer returns $ 1,428 d. Total failure costs $ 0 e. Total quality cost $ 0 Managers at Walla-Walla LTD want to determine the company's cost of quality. The following information has been gathered from the records for August: Defective units Units reworked Defective units returned 4,800 960 320 Appraisal costs $14,000 Cost per unit for rework $18 Prevention costs $68,000 Profit per good unit produced and sold $85 Profit per defective unit sold $43 Cost per unit for customer returns $14 Cost of warranty work $7,200 Compute the following: a. Lost profits from selling defective work $ 0 b. Total costs of failure $ 0 c. Total quality cost $0
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