Alpha Geek

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Category > Accounting Posted 18 May 2017 My Price 7.00

A company has the choice of either selling 750 defective units as scrap

A company has the choice of either selling 750 defective units as scrap or
rebuilding them. They have already spent $14 per unit making these items. The
company could sell the defective units as they are for $8.00 per unit.
Alternatively, the company could rebuild the units at an incremental cost of
$1.00 per unit.  If it rebuilds the units, they will not be able to
produce 750 new units with a unit cost of $3.00 and a normal selling price of
$15.00 each.  What should the company do?

Answers

Alpha Geek
(8)
Status NEW Posted 18 May 2017 09:05 AM My Price 7.00

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Attachments

file 1495100013-1490635_1_636305832780704970_Sunk-and-opportunity-cost.xlsx preview (191 words )
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