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Chang Industries has 1,700 defective units of product that have already cost $13.70 each to produce. A salvage company will purchase the defective units as
Chang Industries has 1,700 defective units of product that have already cost $13.70 each to produce. A salvage company will purchase the defective units as they are for $4.70 each. Chang's production manager reports that the defects can be corrected for $6.30 per unit, enabling them to be sold at their regular market price of $20.40. The incremental income or loss on reworking the units is:
$15,980 loss.
$15,980 income.
$10,710 loss.
$26,690 income.
$23,970 income.
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