MANAGERCIAL ACCOUNTING ACCT 202 ACCOUNTING ACCT 250-50 SPRING 2016 Exam 4 Chapte

Question

MANAGERCIAL ACCOUNTING ACCT 202 ACCOUNTING ACCT 250-50 SPRING 2016 Exam 4 Chapters 22, 23, & 24 K Question 24 (of 28) 24. A company must decide between scrapping or reworking units that do not pass inspection. The company has 13,000 defective units that cost $6.10 per unit to manufacture. The units can be sold as is for $3.20 each, or they can be reworked for $4.80 each and then sold for the full price of $9.30 each. If the units are sold as is, the company will be able to build 13,000 replacement units at a cost of$6.10 each, and sell them at the full price of $9.30 each. What is the incremental income from selling the units as scrap and reworking and selling the units? Should the company sell the units as scrap o ework them? (Enter costs and losses as negative values.) Rework Sale as Scrap Incremental income (loss) The company should Chris Brose instructions help Save & Exit submit Time remaining: 1:20.17

Explanation / Answer

Incremental revenue Sell as such Rework revenue 3.2 9.3 Less:cost 0 4.8 Contribution 3.2 4.5 units 41600 58500 Less:income lost 41600 net income 41600 16900 the company should sell as scrap

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.