Maurice Tutor

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Teaching Since: May 2017
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  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 26 Sep 2017 My Price 3.00

scrapping or reworking

A company must decide between scrapping or reworking units that do not pass inspection. The company has 15,000 defective units that cost $6 per unit to manufacture. The units can be sold as is for $2.50 each, or they can be reworked for $4.50 each and then sold for the full price of $9 each. If the units are sold as is, the company will have to build 15,000 replacement units at a cost of $6 each, and sell them at the full price of $9 each. (1) What is the incremental income from selling the units as scrap? (2) What is the incremental income from reworking and selling the units? (3) Should the company sell the units as scrap or rework them?

Answers

Maurice Tutor
(5)
Status NEW Posted 26 Sep 2017 05:09 PM My Price 3.00

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