(b) That's right. The sale of goods legislation makes the same distinction as the common law between conditions and warranties, and provides essentially similar remedies in the event of a breach.
For a breach of a condition implied into the contract by the sale of goods legislation, a buyer is entitled to 'reject the goods and treat the contract as repudiated'. Under the legislation, damages for a breach of condition may also be claimed if the breach causes loss.
In the circumstances of the present case, where the goods are still being manufactured, A can reject them and claim damages from B.
In the event of a breach of a statutorily implied warranty (as oposed to a condition) a buyer may not reject the goods, but may claim damages for less arising from the breach.