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iren [92.7K]
3 years ago
8

Chang Industries has 2,500 defective units of product that have already cost $14.50 each to produce. A salvage company will purc

hase the defective units as they are for $5.60 each. Chang's production manager reports that the defects can be corrected for $5.50 per unit, enabling them to be sold at their regular market price of $22.00. The incremental income or loss on reworking the units is:
Business
1 answer:
Lubov Fominskaja [6]3 years ago
7 0

Answer:

$27,250

Explanation:

The computation of incremental income or loss on reworking the units is shown below:-

For computing the incremental income or loss on reworking the units first we need to follow some steps which is shown below:-

Incremental revenue per unit = Selling price after rework - Selling price as scrap

= $22.00 - $5.60

= $16.40

Total Incremental Revenue = Incremental revenue per unit × Total defective units

= $16.40 × 2,500

= $41,000

Total rework costs = Total defective units × Defects per unit

= 2,500 × $5.50

= $13,750

Now,

Incremental income or loss on reworking the units = Total Incremental Revenue - Total rework costs

= $41,000 - $13,750

= $27,250

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Read 2 more answers
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Answer:

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<u>Machine #1</u>

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From the above information, the book value of machine #1

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A gain of $7,000 on disposal.

<u>Machine #2</u>

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Sales price = $15,000

From the above information, the book value of machine #2

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A loss of $3,000 on disposal

<u>Machine #3</u>

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From the above information, the book value of machine #1

= $77,000 - $28,000

= $49,000

Gain/(loss) on disposal = $51,000 - $49,000

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A gain of $2,000 on disposal.

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yaroslaw [1]

Answer:

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Credit Cash $2,100

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Dividends                   (2,100)

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Statement of Changes in Stockholders' Equity as of December 31, 2018:

Retained Earnings    $14,500

Balance Sheet as of December 31, 2018:

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Equity:

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Explanation:

a) Data and Calculations:

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Cash expense  (13,800)

Cash dividend    (2,100)

Cash balance  $14,500

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