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Dfective units reworking of units prevention cost

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Reference no: EM13356267

Defective units, reworking of units, prevention cost , appraisal cost given difference of profit earned to find number of defective units.

Variance Corporation is a manufacturer of a versatile statistical calculator. The following information is a summary of defective and returned units for the previous year.

Total defective units

1,000

Number of units reworked

750

Number of customer units returned

150

Profit for a good unit

$40

Profit for a defective unit

$25

Cost to rework a defective unit

$10

Cost of a returned unit

$15

Total prevention cost

$10,000

Total appraisal cost

$5,000

Reference no: EM13356267

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