A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has10,000 defective units that cost $5.30 per unit to manufacture. The units can be a) sold as is for $3.10 each, or b) reworked for $4.60each and then sold for the full price of $8.40 each.What is the incremental income from selling the units as scrap and reworking and selling the units? Should the company sell the unitsas scrap or rework them? (Enter costs and losses as negative values.)Cost of scrap unitsCost to rework unitsOpportunity cost of not making new unitsSales of reworked unitsSales of scrap unitsSale as Scrap$< Prev0 $Rework4 of 110‒‒‒www1Next > A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has10,000 defective units that cost $5.30 per unit to manufacture. The units can be a) sold as is for $3.10 each, or b) reworked for $4.60each and then sold for the full price of $8.40 each.What is the incremental income from selling the units as scrap and reworking and selling the units? Should the company sell the unitsas scrap or rework them? (Enter costs and losses as negative values.)Incremental income (loss)The company should:Sale as Scrap$< Prev0$Rework4 of 11wwwM0Next >

Incremental income is the amount of extra money earned by putting an extra effort on products or…

A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 10,000 defective units that cost $5.30 per unit to manufacture. The units can be a) sold as is for $3.10 each, or b) reworked for $4.60 each and then sold for the full price of $8.40 each. What is the incremental income from selling the units as scrap and reworking and selling the units? Should the company sell the units as scrap or rework them? (Enter costs and losses as negative values.) Cost of scrap units Cost to rework units Opportunity cost of not making new units Sales of reworked units Sales of scrap units Sale as Scrap $ 0 $ Rework 0

A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 10,000 defective units that cost $5.30 per unit to manufacture. The units can be a) sold as is for $3.10 each, or b) reworked for $4.60 each and then sold for the full price of $8.40 each. What is the incremental income from selling the units as scrap and reworking and selling the units? Should the company sell the units as scrap or rework them? (Enter costs and losses as negative values.) Cost of scrap units Cost to rework units Opportunity cost of not making new units Sales of reworked units Sales of scrap units Sale as Scrap $ 0 $ Rework 0

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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