Business, 01.12.2021 02:20 Cutiepie55561
A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 10,000 defective units that cost $6.00 per unit to manufacture. The units can be a) sold as is for $3.50 each, or b) reworked for $4.50 each and then sold for the full price of $9.50 each. What is the incremental income from selling the units as scrap and reworking and selling the units
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