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Cell Design produces cell phone covers for all makes and models of cell phones. The QC manager and controller have forecast the following additional costs to Cell Design sells 1,050,000 units each year at a price of $10 per unit and a contribution margin of 40%. (Click the icon for additional information.) The current costs of quality are as follows: modify the production process: (Click the icon to view the additional costs.) If the improvements result in a 60% decrease in product replacement cost and a 70%, decrease in customer returns, what is the impact on the overall COQ and the company's operating income? What should Cell Design do? Explain. Click the icon to view the costs.) What is the impact on the overall COQ and the company's operating income? (Use parentheses or a minus sign for a net cost.) Amount Benefits of quality improvements Cost of making quality improvements Net benefit (cost) of making quality improvements What should Cell Design do? Explain. The benefits of making the quality improvements implement the changes to improve quality the costs by $ so Cell Design Data Table Prevention costs Appraisal costs Internal failure costs 210,000 S 100,000 Rework 420.000 Scrap $ 21,000 External failure costs $ 315,000 Lost sales from customer returns787,500 Product replacements Print Done Data Table $ 150,000 CAD design improvement Improve machine calibration to meet specifications $137,500 Print Done

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