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I am little confused to calculate Rework Cost .
It says in question that
Rework cost:this is the average rework cost per webcam and is based on an estimate of 15% of webcams requiring rework at a cost of $20 per rework. With the use of more standard parts,the rate of rework will fall to 10% and the cost of each rework will fall to $18.My question is Why they dont use this calculation i.e 50000*.9*18=810000/50000=16.2
Because the rate will fall 10% means 10% less.
Is this correct?
I am looking forward to hearing from you.
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