Question
A company mistakenly produced 16,600 defective chargers at a cost of $138,000. The defective chargers can be sold as scrap for $51,100 or reworked
A company mistakenly produced 16,600 defective chargers at a cost of $138,000. The defective chargers can be sold as scrap for $51,100 or reworked at a cost of $76,600. If the chargers are reworked the company could sell them for $152,000. Note: Indicate negative incremental income with a minus sign. Answer is not complete. Compute the income to scrap and the income to rework. Scrap or Rework Analysis Scrap Rework Revenue from scrapped/reworked units $ 51,100 0 Cost of reworked units 0 152,000 x Income $ 51,100 $ (76,600) Incremental income (loss) to rework Based on incremental income, should the company scrap or rework the units? The company should: Sell the units as scrap
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started