10. Signal mistakenly produced 1,325 defective cell phones. The phones cost $64

Question

10. Signal mistakenly produced 1,325 defective cell phones. The phones cost $64 each to produce. A salvage company will buy the defective phones as they are for $32 each. It would cost Signal $84 per phone to rework the phones. If the phones are reworked, Signal could sell them for $148 each. Assume there is no opportunity cost associated with reworking the phones. Compute the incremental net income from reworking the phones Scrap Rework 42,400 $ 196,1 84,800 Sales Rework costs 111,300 84 Total S (42,400$ ncrease net income by 42 Type here to search ProDisplay P202 FS F6 F9

Explanation / Answer

Calculation Sale of scrapped units 196100 (148*1325) Less cost to rework 111300 (84*1325) Less opportunity cost (salvage company) 42400 (32* 1325) So Incremental Net income 42400

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

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