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Nataly [62]
3 years ago
12

A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 13,

000 defective units that cost $5.40 per unit to manufacture. The units can be a) sold as is for $2.80 each, or b) reworked for $4.60 each and then sold for the full price of $8.20 each. What is the incremental income from selling the units as scrap and reworking and selling the units
Business
1 answer:
Anit [1.1K]3 years ago
6 0

Answer:

Incremental income for Sale as scrap  is $36,400 and Rework is $46,200

Explanation:

                                                              Sale as scrap         Rework

Sales of reworked units (13000*8.2)                                  $106,000

Sales of scrap units (13000*2.8)            $36,400

Cost to rework units (13000*4.6)                                         ($59,800)

Opportunity cost of not making new units

Incremental income (loss)                      $36,400              $46,200

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3 years ago
A mining company owns two mines, each of which produces three grades (high, medium, and low) of ore. The company has a contract
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Answer:

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We start graphing the restrictions in a M1-M2 plane.

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7 0
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