Question
A company makes stuffed golden retriever toys. The company has 406 units in inventory that somehow were manufactured with only one ear. The normal selling
A company makes stuffed golden retriever toys. The company has 406 units in inventory that somehow were manufactured with only one ear. The normal selling price of the stuffed toys is $23.89 each. The total cost of producing all of the one eared toys was $5,972. The company has two choices:
Option 1: Rework the golden retrievers to add the missing ear, at a cost of $1.37 per unit.
Option 2: They have identified a buyer for the one-eared toys. This buyer will pay them $18.12 per unit.
What is the DIFFERENCE between the incremental profit of selecting Option 1 or Option 2? Enter your answer in TOTAL for ALL units. Assume they sell all of the units under either option.
Hint: Calculate the incremental profit for each option. Enter the absolute value of the difference between those two numbers. (in other words, don't put a minus or plus sign in front of the number when you enter it in the box below).
Enter your answer to two decimal place
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