Compute the income for each alternative

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Reference no: EM133342274

Case: Micron Manufacturing produces telescopes. This month it produced 50 telescopes at a cost of $9,000. These telescopes were damaged in storage. Management has identified three alternatives for these telescopes.

1. They can be sold as scrap to a wholesaler for $3,750.

2. They can be disassembled at a cost of $2,000 and the parts sold to a recycler for $6,500.

3. They can be reworked and turned into good units. The cost of reworking the units will be $3,600, after which the units can be sold for $25,000.

Required

(1) Compute the income for each alternative. (2) Which alternative should management select?

Reference no: EM133342274

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