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 $6.10 per unit to manufacture.

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 $6.10 per unit to manufacture. The units can be a) sold as is for $3.40 each, or b) reworked for $4.50 each and then sold for the full price of $9.50 each. 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?

Do you need us to help you on this or any other assignment?


Make an Order Now
0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published.