A company must decide between scrapping or reworking units

Reference no: EM13611375

A company must decide between scrapping or reworking units that do not pass inspection. The company has 15,000 defective units that cost $5.80 per unit to manufacture. The units can be sold as is for $2.50 each, or they can be reworked for $3.50 each and then sold for the full price of $10.10 each. If the units are sold as is, the company will also be able to build 15,000 replacement units at a cost of $5.80 each, and sell them at the full price of $10.10 each. What is the incremental income from selling the units as scrap? What is the incremental income from reworking and selling the units?

Reference no: EM13611375

Questions Cloud

Heat is slowly removed from the steam during a constant : saturated steam at 2 mpa is contained in a piston-cylinder device. the initial volume is 0.25 cubic meters. heat is

Why has patient confidentiality become a more difficult : why has patient confidentiality become a more difficult issue to deal with in the present health care

A company makes telescopes all direct materials used inthe : a company makes telescopes. all direct materials used inthe production of telescopes are added at the beginning of

Blood type ab is found in only 3 of the populationdagger if : blood type ab is found in only 3 of the populationdagger. if 275 people are chosen at random find the probability of

A company must decide between scrapping or reworking units : a company must decide between scrapping or reworking units that do not pass inspection. the company has 15000 defective

An asset which costs 14400 and has accumulated : an asset which costs 14400 and has accumulated depreciation of 8000 is sold for 5600. what amount of gain or loss will

The following information relates to the : the following information relates to the manufacturingoperations of oshaunessy mfg co. during the month of march.

Why would a companys manager be conerned about the quantity : why would a companys manager be conerned about the quantity of its purchase returns if its suppliers allowunlimited

User Account

All Pages