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The management of City Front Incorporated must decide between scrapping or reworking units that do not pass inspection. The company has 11,000 defective units that cost $6.00 per unit to manufacture. The units can be sold as is for $2.50 each or they can be reworked for $3.50 each and then sold for the full price of $9.70 each. What is the incremental income from reworking and selling the units? O $68,200 Ⓒ$40,700 O $27,500 O $106,700

The management of City Front Incorporated must decide between scrapping or reworking units that do not pass inspection. The company has 11,000 defective units that cost $6.00 per unit to manufacture. The units can be sold as is for $2.50 each or they can be reworked for $3.50 each and then sold for the full price of $9.70 each. What is the incremental income from reworking and selling the units? O $68,200 Ⓒ$40,700 O $27,500 O $106,700

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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eBook C aw 11 Knowledge Check 01 The management of City Front Incorporated must decide between scrapping or reworking units that do not pass inspection. The company has 11,000 defective units that cost $6.00 per unit to manufacture. The units can be sold as is for $2.50 each or they can be reworked for $3.50 each and then sold for the full price of $9.70 each. What is the incremental income from reworking and selling the units? O $68,200 Ⓒ$40,700 O $27,500 O $106,700 Prev of 16 Next >
Transcribed Image Text:eBook C aw 11 Knowledge Check 01 The management of City Front Incorporated must decide between scrapping or reworking units that do not pass inspection. The company has 11,000 defective units that cost $6.00 per unit to manufacture. The units can be sold as is for $2.50 each or they can be reworked for $3.50 each and then sold for the full price of $9.70 each. What is the incremental income from reworking and selling the units? O $68,200 Ⓒ$40,700 O $27,500 O $106,700 Prev of 16 Next >
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