Business Solutions Corporation Business Solutions Corporation is a manufacturer of a versatile statistical calculator.The following information is a summary of defective and returned units for the previous year.
Refer to Business Solutions Corporation.The total failure cost is
A)$15,000.
B)$13,500.
C)$11,250.
D)$8,250.

Question

Business Solutions Corporation Business Solutions Corporation is a manufacturer of a versatile statistical calculator.The following information is a summary of defective and returned units for the previous year.
 Refer to Business Solutions Corporation.The total failure cost is
A)$15,000. 
B)$13,500. 
C)$11,250. 
D)$8,250.

Quizplus · Accepted Answer

The total failure cost can be calculated by multiplying the number of defective units by the cost of each unit, and then adding it to the cost of returned units. 
Defective units: 75 + 120 + 45 = 240
Cost of each unit: $50
Total cost of defective units: 240 x 50 = $12,000
Returned units: 35 + 60 = 95
Cost per returned unit: $150
Total cost of returned units: 95 x 150 = $14,250
Total failure cost: 12,000 + 14,250 = $26,250
Therefore, the answer is B.

Business Solutions Corporation Business Solutions Corporation Is a Manufacturer of a Versatile