The following production information about quality costs has been gathered for June 2010: Total defective units ...........

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The following production information about quality costs has been gathered for June 2010:

Total defective units ........... 580

Number of units reworked .......... 380

Number of units returned ......... 100

Total prevention cost ............$24,000

Total appraisal cost ........... $8,500

Per-unit profit for defective units ....... $20

Per-unit profit for good units ........ $56

Cost to rework defective units ....... $16

Cost to handle returned units ........ $10

Using these data, calculate the following:

a. Total cost to rework

b. Profit lost from not reworking all defective units

c. Cost of processing customer returns

d. Total failure costs

e. Total quality cost


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Cost Accounting Foundations and Evolutions

ISBN: 978-1111626822

8th Edition

Authors: Michael R. Kinney, Cecily A. Raiborn

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