Beckem Company produces two different carburetors and is concerned about their quality. The company has identified the following quality activities and costs associated with the two products:

Activities:
Performing warranty work .... $204,000
Scrapping units ......... 153,000
Inspecting ........... 76,500
Quality training .......... 42,500

Required:
1. Calculate the quality cost per unit for each product, and break this unit cost into quality cost categories. Which of the two seems to have the lowest quality?
2. How might a manager use the unit quality costinformation?

Transcribed Image Text:

Carburetor A Carburetor B Units produced Warranty work (units) Scrapped units (number) Inspection (hours) Quality training (hours) 170,000 1,700 3,400 3,400 85 340,000 850 850 1,700 85