Heyer Appliances assembles dishwashers at its plant in Tuscaloosa, Alabama. In February 2017, 60 circulation motors that cost $110 each (from a new supplier who subsequently went bankrupt) were defective and had to be disposed of at zero net disposal value. Heyer Appliances was able to rework all 60 dishwashers by substituting new circulation motors purchased from one of its existing suppliers. Each replacement motor cost $125. Q. What other costs might Heyer Appliances include in its analysis of the total costs of rework due to the circulation motors purchased from the (now) bankrupt supplier?

Signal mistakenly produced 1,025 defective cell phones. The phones cost $67 each to produce. A salvage company will buy the defective phones as they are for $30 each. It would cost Signal $84 per phone to rework the phones. If the phones are reworked. Signal could sell them for $144 each. Signal has excess capacity. Should Signal scrap or rework the phones? Sales Rework costs Income Scrap Rework

The Manassas Company has 55 obsolete keyboards that are carried in inventory at a cost of $9,600.  If these keyboards are upgraded at a cost of $6,500, they could be sold for $19,900.  Alternatively, the keyboards could be sold “as is” for $8,400.  What is the net advantage or disadvantage of re-working the keyboards?

Answer the following questions. A company has an inventory of 1,350 assorted parts for a line of missiles that has been discontinued. The inventory cost is $76,000. The parts can be either (a) remachined at total additional costs of $27,500 and then sold for $33,000 or (b) sold as scrap for $4,000. Which action is more profitable? Show your calculations. A truck, costing $101,500 and uninsured, is wrecked its first day in use. It can be either (a) disposed of for $15,500 cash and replaced with a similar truck costing $102,000 or (b) rebuilt for $82,000, and thus be brand-new as far as operating characteristics and looks are concerned. Which action is less costly? Show your calculations. 1. 2. 1. A company has an inventory of 1,350 assorted parts for a line of missiles that has been discontinued. The inventory cost is $76,000. The parts can be either (a) remachined t total additional costs of $27,500 and then sold for $33,000 or (b) sold as scrap for $4,000. Which action is more…

Safe Travel produces car seats for children from newborn to 2 years old. The company is worried because one of its competitors has recently come under public scrutiny because of product failure. Historically, Safe Travel's only problem with its car seats was stitching in the straps. The problem can usually be detected and repaired during an internal inspection. The cost of the inspection is $5.00 per car seat, and the repair cost is $1.00 per car seat. All 200,000 car seats were inspected last year, and 5% were found to have problems with the stitching in the straps during the internal inspection. Another 1% of the 200,000 car seats had problems with the stitching, but the internal inspection did not discover them. Defective units that were sold and shipped to customers needed to be shipped back to Safe Travel and repaired. Shipping costs are $8.00 per car seat, and repair costs are $1.00 per car seat. However, the out-of-pocket costs (shipping and repair) are not the only costs of…

Bell Company, a manufacturer of audio systems, started its production in October 2017. For the preceding 3 years, Bell had been a retailer of audio systems. After a thorough survey of audio system markets, Bell decided to turn its retail store into an audio equipment factory.Raw materials cost for an audio system will total $75 per unit. Workers on the production lines are on average paid $15 per hour. An audio system usually takes 7 hours to complete. In addition, the rent on the equipment used to assemble audio systems amounts to $5,120 per month. Indirect materials cost $6 per system. A supervisor was hired to oversee production; her monthly salary is $3,840.Factory janitorial costs are $1,410 monthly. Advertising costs for the audio system will be $8,750 per month. The factory building depreciation expense is $7,200 per year. Property taxes on the factory building will be $9,000 per year.     Assuming that Bell manufactures, on average, 1,520 audio systems per month, enter…

Subject: acounting

Elijah Electronics makes wireless headphone sets. The firm produced 27,000 wireless headphone sets during its first year of operation. At year-end, it had no inventory of finished goods. Elijah sold 25,380 units through regular market channels, but 270 of the units produced were so defective that they had to be sold as scrap. The remaining units were reworked and sold as seconds. For the year, the firm spent $144,000 on prevention costs and $72,000 on quality appraisal. There were no customer returns. An income statement for the year follows.   Sales     Regular channel $5,076,000    Seconds 128,250   Scrap 9,450 $5,213,700  Cost of goods sold     Original production costs $1,725,840    Rework costs 37,800   Quality prevention and appraisal 216,000 $1,979,640  Gross margin   $3,234,060  Selling and administrative expenses (all fixed)   882,000  Profit before income taxes   $2,352,060    Compute the total pre-tax…

The Tolar Corporation has 400 obsolete desk calculators that are carried in inventory at a total cost of $576,000. If these calculators are upgraded at a total cost of $100,000, they can be sold for a total of $160,000. As an alternative, the calculators can be sold in their present condition for $40,000. What is the financial advantage (disadvantage) to the company from upgrading the calculators? Multiple Choice $20,000 $(560,000) $120,000 $(60,000