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Andreyy89
4 years ago
6

A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 16,

000 defective units that cost $6.00 per unit to manufacture. The units can be a) sold as is for $3.10 each, or b) reworked for $4.80 each and then sold for the full price of $9.10 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 or rework them? (Enter costs and losses as negative values.)
Business
1 answer:
ryzh [129]4 years ago
8 0

Answer:

It is more profitable to rework the units and sell them for $9.1 each.

Explanation:

Giving the following information:

The company has 16,000 defective units that cost $6.00 per unit to manufacture. The units can be a) sold as-is for $3.10 each, or b) reworked for $4.80 each and then sold for the full price of $9.10 each.

<u>The first $6 per unit is a sunk cost, it will remain the same in both options. Therefore, it should not be taken into account to make a decision.</u>

We need to compute the net income of each option:

Sell as-is:

Effect on income= 16,000*3.1= $49,600

Rework:

Effect on income= 16,000*(9.1 - 4.8)= $68,800

It is more profitable to rework the units and sell them for $9.1 each.

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1. For a given meal, a chef may prefer grilling to baking because it
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[] Answer []

\boxed{Produces \ more \ intense \ flavor}

[] Explanation []

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       A chef prefers to grill because it pulls out the flavor, where-as baking is a slower, less intense method of producing / cooking food. Baking is more bland and does not create a superb audience. When cooking something, you are allowing your food to soak in grease, wine, etc. When baking something, your food sits there slowly without any interaction too much flavor.

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Jones Blanket Company sells blankets for​ $25 each. The variable cost of each blanket is​ $10. If fixed cost is​ $4,500,000, the
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Answer:

given statement is true

Explanation:

given data

sells blankets =​ $25 each

variable cost = $10

fixed cost = $4,500,000

break minus even point =​ 300,000 units

to find out

true/ false

solution

we will check here break minus even point for find true or false

so here

Contribution is express as = sells blankets - variable cost

Contribution = $25 - $10 = $15

so

break minus even point = \frac{fixed \ cost}{Contribution}

put here value

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break minus even point = 300,000

so we can say given statement is true

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