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Signal mistakenly produced 1.425 defective cell phones. The phones cost $66 each to produce. A salvage company will buy the defective phones as they are
Signal mistakenly produced 1.425 defective cell phones. The phones cost $66 each to produce. A salvage company will buy the defective phones as they are for $36 each. It would cost Signal $88 per phone to rework the phones. If the phones are reworked, Signal could sell them for $130 each. Signal has excess capacity. Should Signal scrap or rework the phones? Scrap Rework Sales Rework costs Income Childress Company produces three products, K1, S5, and G9. Each product uses the same type of direct material. K1 uses 4.4 pounds of the material, S5 uses 24 pounds of the material, and G9 uses 5.8 pounds of the material. Demand for all products is strong, but only 44.400 pounds of material are available. Information about the selling price per unit and variable cost per unit of each product follows. Selling price Variable costs Ki $160.76 93.ee S5 $94.68 75.ee G91 $202.12 136.00 Calculate the contribution margin per pound for each of the three products. Orders for which product should be produced and filled first, then second, and then third? (Round your answers to 2 decimal places.) Contribution margin per pound Product K1 Product S5 Product G9 Contribution margin per pound Order in which products should be produced and filled
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