(Cost of quality) Alpine Sunglasses Company has gathered the following information pertaining to quality costs of production for June 2000 of heavy duty sunglasses for skiing:
|
Total defective units |
300 |
|
Number of units reworked |
190 |
|
Number of units returned |
50 |
|
Total prevention cost |
$12,000 |
|
Total appraisal cost |
$6,000 |
|
Per unit profit for defective units |
$10 |
|
Per unit profit for good units |
$28 |
|
Cost to rework defective units |
$8 |
|
Cost to handle returned units |
$5 |
Total cost to rework
b. Profit lost from not reworking all defective units
c. Cost of processing customer returns
d. Total failure costs
e. Total quality cost