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Chang Industries has 2.000 defective units of product that have already cost $14 each to produce. A salvage company will purchase the defective units as

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Chang Industries has 2.000 defective units of product that have already cost $14 each to produce. A salvage company will purchase the defective units as they are for $5 each. Chang's production manager reports that the defects can be corrected for $6 per unit, enabling them to be sold of their regular market price of $21. The incremental income or loss on reworking the units is: 7 Product A requires 5 machine hours per unit to be produced, Product Brequires only 3 machine hours per unit, and the company's productive capacity is limited to 240,000 machine hours. Product A sells for $16 per unit and has variable costs of $6 per unit. Product B sells for $12 per unit and has variable costs of $5 per unit Assuming the company can sell as many units of either product as it produces the company should

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