Question
ABC Company makes dolls. The company has 410 units in inventory that somehow were manufactured with only one eye. The normal selling price of
ABC Company makes dolls. The company has 410 units in inventory that somehow were manufactured with only one eye. The normal selling price of the dolls is $22.22 each. The total cost of producing all of the one eyed toys was $5,359. The company has two choices: Option 1: Rework the dolls to add the missing eye, at a cost of $1.54 per unit. Option 2: They have identified a buyer for the one-eyed toys. This buyer will pay them $18.71 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 places. Do not round any intermediate calculations.
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