Rebecca's Pottery Loft makes a variety of handmade pottery items. She has asked for your advice on one of the items manufactured, a clay pelican. The following information is provided.
Defective pelicans 1,100
Number of pelicans returned 150
Pelicans reworked 200
Profit per good pelican $10
Profit per defective pelican $5
Cost to rework defective pelican $4
Processing cost of a returned pelican $20
Appraisal costs $3,400
Prevention costs $6,000
REQUIRED:
a. Calculate the total profits lost, due to sale of some defective pelicans by Rebecca.
b. Calculate the rework cost.
c. Calculate the cost of processing customer returns.
d. Calculate total failure cost.
e. Calculate total quality cost.