Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Your statistical analyses all showed that the new mold your team identified will reduce the lens defect rate by 6%, from the current level of

image text in transcribed

Your statistical analyses all showed that the new mold your team identified will reduce the lens defect rate by 6%, from the current level of 7.9% defective to 1.9% defective, which will meet your project's goal for lens quality improvement. So, all that's left is to determine if the mold recommendation makes sense financially before submitting your recommendation to management. Although successfully meeting TTi's quality improvement goals will probably allow your company to keep their $350,000 of annual business, management wants you to be conservative and base the financial analysis solely on the costs associated with the reduction of lens defects in case TTI decides to take their business somewhere else at some point). Your company currently produces 200,000 lenses per year, and the cost for each returned defective lens is estimated to be $4.87 by the accounting department. The total cost of implementing the new mold recommendation, including the costs for the new molds, updated documentation, training expenses, and additional storage racks for the molds, is estimated to be $96,443. This is a one-time cost only. Question # 1: What is the financial value for your team's new mold recommendation? SHOW YOUR WORK. Question #2: What is the break-even point in years) for your team's mold recommendation? SHOW YOUR WORK

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Portfolio Of Marketing Audits Company Self Assessment Audits

Authors: David Crosby

1st Edition

1902433157, 978-1902433158

More Books

Students also viewed these Accounting questions

Question

Make efficient use of your practice time?

Answered: 1 week ago