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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 500 rolls of defective wrapping paper at a typical cost of $2.00 per roll. The rolls can be sold as is for $2,000 (a 50% discount) or re-run to correct the Y to an X at a cost of $800 and sold for the normal selling price of $4,000. The incremental advantage/disadvantge to the re-run is: $3,000 advantage $1,800 advantage $1,800 disadvantage $200 advantage $1,200 advantage
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