Question

Rebecca’s Pottery Loft makes a variety of handmade pottery items. She has asked for your advice on one of the items manufactured—a clay pelican. The following information is provided:
Number of defective pelicans ............ 1,100
Number of pelicans returned ............. 150
Number of pelicans reworked ............ 200
Profit per defect-free pelican ............. $ 10.00
Processing cost of a returned pelican ......... $ 20.00
Profit per defective pelican ............ $ 5.00
Cost to rework defective pelican .......... $ 4.00
Total appraisal costs ............... $ 3,400
Total prevention costs ............... $ 6,000

Required
A. Calculate the total profits lost because Rebecca sold defective pelicans.
B. Calculate the rework cost.
C. Calculate the cost of processing customer returns.
D. Calculate total failure cost.
E. Calculate total quality cost.



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  • CreatedMarch 11, 2015
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