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melamori03 [73]
4 years ago
10

Signal mistakenly produced 1,450 defective cell phones. The phones cost $64 each to produce. A salvage company will buy the defe

ctive phones as they are for $32 each. It would cost Signal $82 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.
Business
1 answer:
posledela4 years ago
5 0

Answer:

Incremental income from reworking the phone   is $49,300

Explanation:

                         Scrap              Rework

Sales                $46,400          $214,600

                        <em>(32 * 1,450)      (148 * 1,450)</em>

<em />

- Rework costs       0                   $118,900

                          <u>                         </u><em><u>(82 * 1,450)</u></em>

Profit                 <u>$46,400            $95,700</u>

Incremental income from reworking the phone  

= $95,700 - $46,400

= $49,300

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