QS 23-9 Scrap or rework LO A1

Signal mistakenly produced 1,325 defective cell phones. The phones cost $64 each to produce. A salvage company will buy the defective phones as they are for $34 each. It would cost Signal $88 per phone to rework the phones. If the phones are reworked, Signal could sell them for $142 each. Assume there is no opportunity cost associated with reworking the phones. Compute the incremental net income from reworking the phones.

QS 23-9 Scrap or rework LO A1 Signal mistakenly produced 1,325 defective cell phones. The phones cost $64 each to produce. A salvage company will buy the defective phones as they are for $34 each. It would cost Signal $88 per phone to rework the phones. If the phones are reworked, Signal could sell them for $142 each. Assume there is no opportunity cost associated with reworking the phones. Compute the incremental net income from reworking the phones. Scrap Rework Sales Rework costs Total