4 Exercise 23-6 Scrap or rework LO A1 A company must decide between scrapping or reworking units that do not pass inspection. The company has 19,000 defective units that cost $5.90 per unit to manufacture. The units can be sold as is for $3.30 each, or they can be reworked for $4.50 each and then sold for the full price of $9.20 each. If the units are sold as is, the company will be able to build 19,000 replacement units at a cost of $5.90 each, and sell them at the full price of $9.20 each points 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.) eBook Sale as Scrap Rework Hint Print Incremental income (loss) References The company should: 75 5 Exercise 23-9 Sales mix determination and analysis LO A1 Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is two units per hour and for Product MTV is five units per hour. The machine's capacity is 2,200 hours per year. Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 3,740 units of Product TLX and 2,100 units of Product MTV Selling prices and variable costs per unit to produce the products follow. 75 points Sa per unit Product TLX Product MTV eBook Selling price per unit Variable costs per unit $11.00 $6.60 3.30 3.96 Hint Determine the company's most profitable sales mix and the contribution margin that results from that sales mix. (Round cost per unit answers to 2 decimal places.) Print Product TLX Product MTV Contribution margin per unit References Contribution margin per production hour Total Product TLX Product MTV Maximum number of units to be sold 3,740 2,100 Hours required to produce maximum units For Most Profitable Sales Mix Product TLX Product MTV Total Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin LO