We created a service PO that was tied to a WO.  The WO has three outside operations.  The first operation on the WO was to machine to print.  The second operation was a secondary machine operation.  The third operation was passivate.  Parts were purchased on the service PO for the first operation, inspected, received and sent to the second outside operation.  When work began on the second operation it was discovered the parts were not machined properly.  They technically should have been rejected on the first operation.  There was enough time between the receipt of the PO at the first operation and the discivery of the bad parts, the PO was paid.  Some of the parts were acceptable and completed through all operations.  What is the best way to handle the return of the parts and make sure the WO is costed correctly?