Managers at Schubert Corp. want to determine the company's cost of quality. The following information has been gathered from the records for August 2010:
Defective units .............. 6,000
Units reworked .............. 1,200
Defective units returned ........... 400
Appraisal costs .............. $13,600
Cost per unit for rework .......... $20
Prevention costs ............. $85,000
Profit per good unit produced and sold .... $75
Profit per defective unit sold ........ $45
Cost per unit for customer returns ...... $15
Cost of warranty work ........... $9,000
Compute the following:
a. Lost profits from selling defective work
b. Total costs of failure
c. Total quality cost