A Company Inadvertently Produced 6,000 Defective Portable CD Players

question 16

Essay

A company inadvertently produced 6,000 defective portable CD players. The CD players cost $20 each to be manufactured. A salvage company will purchase the defective units as they are for $16 each. The production manager reports that the defects can be corrected for $9 per unit, enabling the company to sell them at the regular price of $30.00. The repair operations would not affect other production operations. Prepare an analysis that shows which action should be taken.

---

Definitions:

Efficiency

The ability to achieve a desired result without wasting materials, time, or energy.

Public Company Accounting Oversight Board

An independent oversight body responsible for supervising the audits of public companies to protect investors and the public interest.

Whistle-Blowing Protection

Legal safeguards for employees who expose wrongdoing, corruption, or illegal activities within their organization.

Golden Rule

An ethical principle suggesting that one should treat others as one's self would wish to be treated.