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Author Question: LaCrosse Products has a budget of $904,000 in 2017 for prevention costs. If it decides to automate a ... (Read 155 times)

chandani

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LaCrosse Products has a budget of $904,000 in 2017 for prevention costs. If it decides to automate a portion of its prevention activities, it will save $80,500 in variable costs. The new method will require $40,900 in training costs and $109,000 in annual equipment costs. Management is willing to adjust the budget for an amount up to the cost of the new equipment. The budgeted production level is 154,000 units.

Appraisal costs for the year are budgeted at $610,000. The new prevention procedures will save appraisal costs of $50,100. Internal failure costs average $16 per failed unit of finished goods. The internal failure rate is expected to be 4% of all completed items. The proposed changes will cut the internal failure rate by one-third. Internal failure units are destroyed. External failure costs average $56 per failed unit. The company's average external failures average 4% of units sold. The new proposal will reduce this rate by 45%. Assume all units produced are sold and there are no ending inventories.

How much will appraisal costs change assuming the new prevention methods reduce material failures by 40% in the appraisal phase?
◦ $149,900 decrease
◦ $69,400 increase
◦ $50,100 decrease
◦ $32,853 decrease


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Marked as best answer by chandani on Mar 6, 2021

amandalm

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Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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chandani

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Reply 2 on: Mar 6, 2021
:D TYSM


Dominic

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Reply 3 on: Yesterday
Gracias!

 

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