EXERCISE #3 The original QPR is: (85% x 540 = 459) + (15% x 540 = 81) but these are defective units, the good-quality units are only half (50% x 81 = 40.5), thus QPR = 459 + 40.5 (540 x RM78) + (40.5 x RM23) QPR = 499.5/43051.50 x 100 QPR = 1.16

CASE (A): INCREASE PRODUCTION RATE TO 850 UNITS

CASE (B): REDUCE PROCESSING COST TO RM55 AND REWORK COST TO RM18

CASE (C): INCREASE INITIAL GOOD-QUALITY UNITS TO 95%