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A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 13.000 defective units that cost
A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 13.000 defective units that cost $5.70 per unit to manufacture. The units can be a) sold as is for $3.10 each, or b) reworked for $4.BD each and then sold for the full price of $8.00 each. 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.) Sale as Scrap Rework Opportunity cost of not making new units Cost to rework units Sales of scrap units Incremental income loss) The company should Cobe Company has already manufactured 19.000 units of Product A at a cost of $15 per unit. The 19,000 units can be sold at this stage for $500,000. Alternative y, the units can be further processed at a $240,000 total additional cost and be converted into 5,500 units of Product B and 12,000 units of Product C. Per unit selling price for Product B is $109 and for Product C is $52 1. Prepare an analysis that shows whether the 19,000 units of Product A should be processed further or not? Sell as is Process Further Sales Relevant costs: Total relevant costs Income loss) Incremental net income (or loss) if processed further The company should
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