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Runner Carpet produced 1 , 1 3 8 yards of its economy - grade carpet. In the coloring process, there was a pigment defect, and
Runner Carpet produced yards of its economygrade carpet. In the coloring process, there was a pigment defect, and the
resulting color appeared to be faded. The carpet normally sells for $ per yard: $ of variable cost per yard and $ of fixed cost per
yard have been assigned to the carpet.
The company realizes that it cannot sell the carpet for $ per yard through its normal channels, unless the coloring process is
repeated. The incremental cost of the process is $ per yard. However, Practical Home Solutions is willing to buy the carpet in its
current faded condition for $ per yard.
Should Runner repeat the coloring process or sell the carpet to Practical Home Solutions?
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