How do managers decide whether to incur rework costs for a spoiled unit?

Question

Quizplus · Accepted Answer

Managers should evaluate whether the cost of rework is worth the benefit of producing a unit that meets the requirements. This requires a cost/benefit analysis weighing the cost of rework against the potential benefits of producing a high-quality product that meets customer requirements. Materiality, matching concept, and relationship to total job cost may also be factors considered in this analysis, but ultimately the decision should be based on a cost/benefit analysis.

How Do Managers Decide Whether to Incur Rework Costs for a Spoiled