Problem 23-2A (Algo) Scrap or rework LO P2 Hip Manufacturing produces denim clothing. This year it produced 3,320 denim jackets at a cost of $99,600. These jackets were damaged in the warehouse during storage. Management identified three alternatives for these jackets. 1. Jackets can be sold as scrap to a secondhand clothing shop for $19,920. 2. Jackets can be disassembled at a cost of $6,640 and sold to a recycler for $39,840. 3. Jackets can be reworked and turned into good jackets. The cost of reworking the jackets will be $112,880, and the jackets can then be sold for $149,400. Required: (1) Compute the income for each alternative. (2) Which alternative should be chosen? Scrap, Recycle or Rework Analysis Revenue from scrap/recycle/rework Cost of recycled/reworked units Income Scrap Recycle Rework $ ° $ 0 $
Problem 23-2A (Algo) Scrap or rework LO P2 Hip Manufacturing produces denim clothing. This year it produced 3,320 denim jackets at a cost of $99,600. These jackets were damaged in the warehouse during storage. Management identified three alternatives for these jackets. 1. Jackets can be sold as scrap to a secondhand clothing shop for $19,920. 2. Jackets can be disassembled at a cost of $6,640 and sold to a recycler for $39,840. 3. Jackets can be reworked and turned into good jackets. The cost of reworking the jackets will be $112,880, and the jackets can then be sold for $149,400. Required: (1) Compute the income for each alternative. (2) Which alternative should be chosen? Scrap, Recycle or Rework Analysis Revenue from scrap/recycle/rework Cost of recycled/reworked units Income Scrap Recycle Rework $ ° $ 0 $
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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