Evaluating external failure costs with real worlddata The federal government maintains a website devoted to providing information
Question:
Go to recalls.gov
Click on the Consumer Products tab at the top of the screen
Click on CPSC Recalls—Home
Use the “Find Recalls by” month and year options to look up information about the following recalls that occurred in November 2009:
■ Maclaren USA Recalls to Repair Strollers Following Fingertip Amputations, and
■ Infant Entrapment and Suffocation Prompts Stork Craft to Recall . . .
Required
For each of these two recalls:
a. Explain why the product was recalled.
b. Who was most responsible for the problem that resulted in the recall?
c. Who will be negatively affected by the faulty product?
d. What are the external failure costs related to the faulty product? Describe the nature of these costs; you will not be able to identify dollar amounts.
e. At what point in the pre-sale process could steps have been taken to prevent the faulty product from being produced and/or sold?
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Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-0078110894
6th Edition
Authors: Edmonds, Tsay, olds
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