- The Denver Corporation manufactures filing cabinets in two operations: machining and finishing. It provides the following information: Machining Finishing 100,000 units 100,000 units Annual capacity...

Denver produces 2,000 defective units at the machining operation. What is the cost to Denver of the defective items produced? Explain your answer briefly.

Extracted text: - The Denver Corporation manufactures filing cabinets in two operations: machining and finishing. It provides the following information: Machining Finishing 100,000 units 100,000 units Annual capacity Annual production Fixed operating costs (excluding direct materials) Fixed operating costs per unit produced (S600,000 + 100,000; S300,000 + 100,000) 120,000 units 100,000 units $600,00 $6 per unit $300,000 $3 per unit Each cabinet sells for $75 and has direct material costs of $35 incurred at the start of the machining opera- tion. Denver has no other variable costs. Denver can sell whatever outout it produces. The following require- ments refer only to the preceding data.