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mr Goodwill [35]
2 years ago
11

Signal mistakenly produced 1,075 defective cell phones. The phones cost $70 each to produce. A salvage company will buy the defe

ctive phones as they are for $39 each. It would cost Signal $82 per phone to rework the phones. If the phones are reworked, Signal could sell them for $146 each. Signal has excess capacity. Should Signal scrap or rework the phones
Business
1 answer:
kow [346]2 years ago
5 0

Answer: Rework the phones

Explanation:

The phones have already been produced so the cost price of $70 does not matter as it is a sunk cost.

The decision the company makes between scrap and reworking will depend on which option bring in more money.

Scrap = $39

Reworking:

= Price after reworking - Cost to rework

= 146 - 82

= $64

Incremental income of reworking over scrap:

= 1,075 * (64 - 39)

= $‭26,875‬

<em>Signal makes an incremental income of $‭26,875‬ if they rework the phones so they should do that. </em>

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FALSE. It is not greater then firms with smaller cash flows.
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3 years ago
Rotato, a U.S. tire company, produces a set of tires at a plant in Michigan on September 16, 2019. It sells the set of tires to
anygoal [31]

Answer:

Excluded from GDP

The production of the set of tires does not included on the GDP as it is referred to as an intermediate goods which are used to produce the final product (which is the two door coupe, in this case).

Explanation:

Gross domestic Production (GDP) represent the total production of a nation within its domestic borders. Some of the items that are excluded in GDP include: sales of goods that were produced outside the domestic borders of the country, intermediate goods that are used to produce other final goods, sales of used goods, illegal sales of goods and services (black market) and transfer payments made by the government

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3 years ago
There exists a(n)
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Answer:

Direct, upward sloping

Explanation:

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7 0
3 years ago
Cheyenne Corp. is authorized to issue both preferred and common stock. The par value of the preferred is $50. During the first y
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Answer:

Feb. 1

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July 1

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Credit : Preferred Stock (66,000 x $50)   $3,300,000

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Explanation:

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2 years ago
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Answer:

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