-S Garcia Company has 10,500 units of its product that were produced at a cost of $157,500. The units were damaged in a rainstorm. Garcia can sell the units as scrap for $21,000, or it can rework the units at a cost of $39,500 and then sell them for $52,000. (a) Prepare a scrap or rework analysis of income effects. (b) Should Garcia sell the units as scrap or rework them and then sell them? (a) Scrap or Rework Analysis Revenue from scrapped/reworked units Cost of reworked units Income Incremental income (b) The company should: wwwwwwwwwww wwwwwwwwww Scrap Rework

-S Garcia Company has 10,500 units of its product that were produced at a cost of $157,500. The units were damaged in a rainstorm. Garcia can sell the units as scrap for $21,000, or it can rework the units at a cost of $39,500 and then sell them for $52,000. (a) Prepare a scrap or rework analysis of income effects. (b) Should Garcia sell the units as scrap or rework them and then sell them? (a) Scrap or Rework Analysis Revenue from scrapped/reworked units Cost of reworked units Income Incremental income (b) The company should: wwwwwwwwwww wwwwwwwwww Scrap Rework

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

H1.
A company must decide between scrapping or reworking units that do not pass inspection. The company has 19,000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $57,000 or reworked for $87,400 and then sold for $165,300. (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
Cari Heat (CH) Ltd. is currently faced with a critical decision regarding its productionequipment. Cari Heat (CH) is evaluating two options for its production equipment:upgrading or replacing. The company manufactures and sells 7,500 heaters every year, eachpriced at $920. The current production equipment, which was acquired at a cost of$2,150,000, has been in use for just two years and is subject to straight-line depreciation overa five-year useful life. Furthermore, it possesses no terminal disposal value, but it can becurrently sold for $650,000.The following table presents data for the two alternatives:A B C1 Choice Upgrade Replace2 One-time equipment costs $3,500,000 $5,200,0003 Variable manufacturing cost per Heater $180 $904 Remaining useful life of equipment (years) 3 35 Terminal disposal value of equipmentRequired0 01. Prepare a schedule, for the remaining 3 years, reflecting whether CH should upgrade itsproduction line or replace it? 2. Assuming that all other data are as…
Urmila
Munoz Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here. Cost of materials (13,100 Units × $19) $ 248,900 Labor (13,100 Units × $12) 157,200 Depreciation on manufacturing equipment* 25,000 Salary of supervisor of engine production 69,000 Rental cost of equipment used to make engines 27,000 Allocated portion of corporate-level facility-sustaining costs 82,000 Total cost to make 13,100 engines $ 609,100 *The equipment has a book value of $108,000 but its market value is zero.Required Determine the maximum price per unit that Munoz would be willing to pay for the engines. Determine the maximum price per unit that Munoz would be willing to pay for the engines, if production increased to 18,650 units. (For all requirements, Round your answers to 2 decimal places.)
A
* Your answer is incorrect. Crane Company sells 302 units of its products for $20 each to John Inc. for cash. Crane allows John to return any unused product within 30 days and receive a full refund. The cost of each product is $13. To determine the transaction price, Crane decides that the approach that is most predictive of the amount of consideration to which it will be entitled is the probability-weighted amount. Using the probability-weighted amount, Crane estimates that (1) 9 products will be returned and (2) the returned products are expected to be resold at a profit. (a) Indicate the amount of net sales. Net sales $ (b) Indicate the amount of estimated liability for refunds. Liability for refunds $ Cost of goods sold 5869 (c) Indicate the amount of cost of goods sold that Crane should report in its financial statements Lassume that none of the products fave been returned at the financial statement date) 5 eTextbook and Media 171 Q Search 3913 (7
Need help
Legendary Motors has 7,000 defective autos on hand, which cost $12, 880,000 to manufacture. Legendary can either sell these defective autos as scrap for $8,000 per auto, or spend an additional $18, 320, 000 on repairs and then sell them for $12,000 per unit. What is the net advantage to repair the autos compared to selling them for scrap? Group of answer choices $84,000,000 $18, 320, 000 $9, 680,000 $56,000,000
Help me
Answer the following questions. 1. 2. A company has an inventory of 1,050 assorted parts for a line of missiles that has been discontinued. The inventory cost is $73,000. The parts can be either (a) remachined at total additional costs of $25,500 and then sold for $32,500 or (b) sold as scrap for $2,500. Which action is more profitable? Show your calculations. A truck, costing $104,500 and uninsured, is wrecked its first day in use. It can be either (a) disposed of for $16,000 cash and replaced with a similar truck costing $106,000 or (b) rebuilt for $82,000, and thus be brand-new as far as operating characteristics and looks are concemed. Which action is less costly? Show your calculations 1. A company has an inventory of 1,050 assorted parts for a line of missiles that has been discontinued. The inventory cost is $73,000. The parts can be either (a) remachined at total additional costs of $25,500 and then sold for $32,500 or (b) sold as scrap for $2,500. Which action is more…
A company must decide between scrapping or reworking units that do not pass Inspection. The company has 10,000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $31,000 or reworked for $45,000 and then sold for $85,000. (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