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12 pts QUESTION 4(12 marks) The question has got three requirements and IntaSecure produces car seats for children from newborn to be years old. The company is worried because one of its competitors has recently come under public scrutiny owing to product failure InfaSecure's only problem with its car seats is stitching in the straps. The problem can say be detected and repaired during an internal inspection The cost of the inspection is $4.00 per car seat and the repair cost is $3. All 100 000 car seats were inspected last year and 12% were found to have problems with the stitching in the straps. Another 3 of the 100 000 car seats had problem with the stitching but were not detected during internal inspection. When InSecure has sold and shipped defective seats to customers customers return them and infa5ecure pays $8 for shipping costs and repairs the units at a cost of $3 per seat. However, the shipping and repair costs are not the only costs resulting from the defects that remained undetected by the internal inspection Management estimates that negative potricity and social media commentary will result in a loss of $200 for each defect discovered by customer Based on the information on quality control activities collated above. Matt Andrews, the management accountant of IntSecunt, calculates insecure costs of quality control as follows Appraisal cost 5400000 na Securests of quality control as follow Appraisal cost 5400 000 Internal failure cost $36000 Out-of-pocket external failure cost 533 000 Opportunity cost of external foilure 5600 000 Total cost of quality control 51069 000 Required (a) Matt Andrews is concemed about the high upfront cost of inspecting all 100 000 units. Hels considering an alternative internal Inspection plan that will cost only $1.00 per case inspected During the intemat inspection this alternative technique will detect 45% of the 100 000 car seats that have stitching problems. Another 4% will be detected after the car seats are sold and ripped Identity and calculate each cost of quality category appraisal cost, interal talute cout, out of pocket external failure cost, opportunity cost of external fature and the total costs of quality for InfaSecure after the alternative internal inspection plan has been implemented. (4 mark (b) Do you think Mr. Andrews alternative internal inspection plan is successful? Briefly dhours considering both the short-run and long-run success of the alternative inspection plan (4 mars Id You replaced Matt Andrews as the new management accountant of insecure. What would you do first before changing InfaSecure's inspection process for reducing its total costs of quality control Discuss briefly (4 marks) 12 pts QUESTION 4(12 marks) The question has got three requirements and IntaSecure produces car seats for children from newborn to be years old. The company is worried because one of its competitors has recently come under public scrutiny owing to product failure InfaSecure's only problem with its car seats is stitching in the straps. The problem can say be detected and repaired during an internal inspection The cost of the inspection is $4.00 per car seat and the repair cost is $3. All 100 000 car seats were inspected last year and 12% were found to have problems with the stitching in the straps. Another 3 of the 100 000 car seats had problem with the stitching but were not detected during internal inspection. When InSecure has sold and shipped defective seats to customers customers return them and infa5ecure pays $8 for shipping costs and repairs the units at a cost of $3 per seat. However, the shipping and repair costs are not the only costs resulting from the defects that remained undetected by the internal inspection Management estimates that negative potricity and social media commentary will result in a loss of $200 for each defect discovered by customer Based on the information on quality control activities collated above. Matt Andrews, the management accountant of IntSecunt, calculates insecure costs of quality control as follows Appraisal cost 5400000 na Securests of quality control as follow Appraisal cost 5400 000 Internal failure cost $36000 Out-of-pocket external failure cost 533 000 Opportunity cost of external foilure 5600 000 Total cost of quality control 51069 000 Required (a) Matt Andrews is concemed about the high upfront cost of inspecting all 100 000 units. Hels considering an alternative internal Inspection plan that will cost only $1.00 per case inspected During the intemat inspection this alternative technique will detect 45% of the 100 000 car seats that have stitching problems. Another 4% will be detected after the car seats are sold and ripped Identity and calculate each cost of quality category appraisal cost, interal talute cout, out of pocket external failure cost, opportunity cost of external fature and the total costs of quality for InfaSecure after the alternative internal inspection plan has been implemented. (4 mark (b) Do you think Mr. Andrews alternative internal inspection plan is successful? Briefly dhours considering both the short-run and long-run success of the alternative inspection plan (4 mars Id You replaced Matt Andrews as the new management accountant of insecure. What would you do first before changing InfaSecure's inspection process for reducing its total costs of quality control Discuss briefly (4 marks)

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