Please help show all work to get credit. 21.8% 5.0% 23.0% 28.0% Aide Industries

Question

Please help show all work to get credit.

21.8% 5.0% 23.0% 28.0% Aide Industries is a division of a major corporation. Data concerning the most recent year appears below: The division's margin is closest to: Cung Inc. has some material that originally cost $68,400. The material has a scrap value of $30,100 as is, but if reworked at a cost of $1,400, it could be sold for $30,800. What would be the incremental effect on the company's overall profit of reworking and selling the material rather than selling it as is as scrap?

Explanation / Answer

division margin = operating income/sales = 870000/17400000 = 5%

2) selling price reworked = 30800

less: cost of rework = 1400

total = 29400

less: cost = 68400 = -39000

so the material should be sold as scrap

incremental effect = 30100 - 29400 = -700

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