Speedprint’current presses have a quality problem that causes variations in the shade of some colors. Its engineers suggest changing a key component in each press.The new component will cost $70 moreThan the old one. In the next year, however, SpeedPrint expects that with the new componer rework, (2) save 850 hours of customer support, (3) move 225 fewer loads, (4) save 8,000 hours of Warranty repairs, and(5) sell an additional 140 printing presses, for a total contribution margin of$1,680,000believes that even as it improves quality, it will not be able to save any of the fixed Costs of rework or repair. speedPrint uses a 1-year time horizon for this decision because it plans to introduce a new press at the end of the year.
Speedprint’current presses have a quality problem that causes variations in the shade of some colors. Its engineers suggest changing a key component in each press.The new component will cost $70 moreThan the old one. In the next year, however, SpeedPrint expects that with the new componer rework, (2) save 850 hours of customer support, (3) move 225 fewer loads, (4) save 8,000 hours of Warranty repairs, and(5) sell an additional 140 printing presses, for a total contribution margin of$1,680,000believes that even as it improves quality, it will not be able to save any of the fixed Costs of rework or repair. speedPrint uses a 1-year time horizon for this decision because it plans to introduce a new press at the end of the year.
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