Exercise 23-4 (Algo) Scrap or rework LO P2 A company must decide between scrapping or reworking units that do not pass inspection. The company has 13,000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $45,500 or reworked for $65,000 and then sold for $119,600. (a) Prepare a scrap or rework analysis of income effects. (b) Should the company sell the units as scrap or rework them? (a) Scrap or Rework Analysis Revenue from scrapped/reworked units Cost of reworked units Income Incremental income (b) The company should Scrap Rework

Exercise 23-4 (Algo) Scrap or rework LO P2 A company must decide between scrapping or reworking units that do not pass inspection. The company has 13,000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $45,500 or reworked for $65,000 and then sold for $119,600. (a) Prepare a scrap or rework analysis of income effects. (b) Should the company sell the units as scrap or rework them? (a) Scrap or Rework Analysis Revenue from scrapped/reworked units Cost of reworked units Income Incremental income (b) The company should Scrap Rework

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 19E: Walloon Company produced 150 defective units last month at a unit manufacturing cost of 30. The...

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Exercise 23-4 (Algo) Scrap or rework LO P2
A company must decide between scrapping or reworking units that do not pass inspection. The company has 13,000 defective units
that have already cost $132,000 to manufacture. The units can be sold as scrap for $45,500 or reworked for $65,000 and then sold
for $119,600.
(a) Prepare a scrap or rework analysis of income effects.
(b) Should the company sell the units as scrap or rework them?
(a) Scrap or Rework Analysis
Revenue from scrapped/reworked units
Cost of reworked units
Income
Incremental income
(b) The company should
Scrap
Rework

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A company must decide between scrapplng or reworking units thnat do not pass Inspection. The comparny has 4A 5000 defectve units than The units can be sold as scrap for $174,000 or reworked for $220,500 and then sold for $416,000. f the company decides to rework th Multiple Cholce $45,000. $242,000. $(97,750). $195,500. $21,500.
A company must decide between scrapping or reworking units that do not pass inspection. The company has 16,000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $48,000 or reworked for $78,400 and then sold for $144,000. (a) Prepare a scrap or rework analysis of income effects. (b) Should the company sell the units as scrap or rework them? 4) Sempor Red Analysis Revenue from sorappedworked un Cast of reworked units Income incrementalne by The company should Rework
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