Rework the product cost calculations for each of the
following alternatives recommended by the design engineers:
a. Cut product quality, which will reduce direct materials
cost by 20 percent and purchased parts cost by 15 percent.
b. Increase the quality of direct materials, which will
increase direct materials cost by 20 percent but will reduce machine hours by
10 percent, manufacturing labor hours by 16 percent, and assembly labor hours
by 20 percent.
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