Question
Hanno Corp manufactures holiday wrapping paper. The print design had a typo and instead of saying Merry Xmas the wrap says Merry YMas and Hanno
Hanno Corp manufactures holiday wrapping paper. The print design had a typo and instead of saying "Merry Xmas" the wrap says "Merry YMas" and Hanno ends up wth 1,000 rolls of defective wrapping paper at a typical cost of $1.40 per roll. The rolls can be sold as is for $1,000 (a 75% discount) or re-run to correct the Y to an X at a cost of $2,800 and sold for the normal selling price of $4,000. The incremental advantage/disadvantage to the re-run is:
Possible answers:
a) $1,800 advantage
b) $1,800 disadvantage
c) $3,000 advantage
d) $200 advantage
e) $1,200 advantage
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