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Smith & Gauslow has 7,000 units of its only product in inventory that it made last year costing $22 each. This year's model is superior
Smith & Gauslow has 7,000 units of its only product in inventory that it made last year costing $22 each. This year's model is superior to last year's, and the 7,000 units cannot be sold at last year's regular selling price of $35 each. Smith & Gauslow has two alternatives for these items: (1) they can be sold to a wholesaler for $8 each or (2) they can be reworked at a cost of $125,000 and then sold for $25 each. Prepare an analysis to determine whether Smith & Gauslow should sell the products as is or rework them and then sell them. INCREMENTAL REVENUE AND COST OF ADDITIONAL PROCESSING Revenue if processed further Revenue if sold as is Incremental revenue Incremental net income(Loss) $ The company should
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