Garcia Company has 10,800 units of its product that were produced at a cost of $162,000....

Transcribed Image Text:

Garcia Company has 10,800 units of its product that were produced at a cost of $162,000. The units were damaged in a rainstorm. Garcia can sell the units as scrap for $32,400, or it can rework the units at a cost of $51,200 and then sell them for $67,400. (a) Prepare a scrap or rework analysis of income effects. (b) Should Garcia sell the units as scrap or rework them and then sell them? (a) Scrap or Rework Analysis Scrap Rework Revenue from scrapped/reworked units Cost of reworked units Income Incremental income (b) The company should: $ 0 69 $ 0 Garcia Company has 10,800 units of its product that were produced at a cost of $162,000. The units were damaged in a rainstorm. Garcia can sell the units as scrap for $32,400, or it can rework the units at a cost of $51,200 and then sell them for $67,400. (a) Prepare a scrap or rework analysis of income effects. (b) Should Garcia sell the units as scrap or rework them and then sell them? (a) Scrap or Rework Analysis Scrap Rework Revenue from scrapped/reworked units Cost of reworked units Income Incremental income (b) The company should: $ 0 69 $ 0

Answer rating: 100% (QA)

Scrap or Rework Analysis of Garcia Company a Scrap or Rework Analysis Option Revenue Cost Income Inc... View the full answer