Identify the correct option for the given statement.

Question

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Answer 1

Question

Chapter 25, Problem 1MCQ

To determine

Identify the correct option for the given statement.

Expert Solution & Answer

Answer to Problem 1MCQ

a. Correct the defective item and sell them at the regular price.

Explanation of Solution

Incremental revenue:

Incremental revenue refers to the difference in the total revenue earned when the product or service is sold at split-off point and the total revenue earned when the product or service is sold after further processing.

In this case, a company accidently produced 3000 defective items (MP3 Player). These 3000 defective items are offered at a rate of $8 per item by a recycler, and on the other hand these detective items can be fixed at a rate of $10 and could be sold at a regular market price of $19 per item.

The company by reworking those defective items can produce incremental revenue of $11 per unit ($19−$8). Since the cost to rework the defective items are $10 per item, and thus the company is better off by $1 per unit when it reworks these products and sells them at the regular price.

From the above explanation it is clear that option b, c and d are incorrect and only option a is correct.

Conclusion

Hence the correct option is option a.

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Answer 2

Question

Chapter 25, Problem 1MCQ

To determine

Identify the correct option for the given statement.

Expert Solution & Answer

Answer to Problem 1MCQ

a. Correct the defective item and sell them at the regular price.

Explanation of Solution

Incremental revenue:

Incremental revenue refers to the difference in the total revenue earned when the product or service is sold at split-off point and the total revenue earned when the product or service is sold after further processing.

In this case, a company accidently produced 3000 defective items (MP3 Player). These 3000 defective items are offered at a rate of $8 per item by a recycler, and on the other hand these detective items can be fixed at a rate of $10 and could be sold at a regular market price of $19 per item.

The company by reworking those defective items can produce incremental revenue of $11 per unit ($19−$8). Since the cost to rework the defective items are $10 per item, and thus the company is better off by $1 per unit when it reworks these products and sells them at the regular price.

From the above explanation it is clear that option b, c and d are incorrect and only option a is correct.

Conclusion

Hence the correct option is option a.

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Answer 3

Question

Chapter 25, Problem 1MCQ

To determine

Identify the correct option for the given statement.

Expert Solution & Answer

Answer to Problem 1MCQ

a. Correct the defective item and sell them at the regular price.

Explanation of Solution

Incremental revenue:

Incremental revenue refers to the difference in the total revenue earned when the product or service is sold at split-off point and the total revenue earned when the product or service is sold after further processing.

In this case, a company accidently produced 3000 defective items (MP3 Player). These 3000 defective items are offered at a rate of $8 per item by a recycler, and on the other hand these detective items can be fixed at a rate of $10 and could be sold at a regular market price of $19 per item.

The company by reworking those defective items can produce incremental revenue of $11 per unit ($19−$8). Since the cost to rework the defective items are $10 per item, and thus the company is better off by $1 per unit when it reworks these products and sells them at the regular price.

From the above explanation it is clear that option b, c and d are incorrect and only option a is correct.

Conclusion

Hence the correct option is option a.

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Answer 4

Question

Chapter 25, Problem 1MCQ

To determine

Identify the correct option for the given statement.

Expert Solution & Answer

Answer to Problem 1MCQ

a. Correct the defective item and sell them at the regular price.

Explanation of Solution

Incremental revenue:

Incremental revenue refers to the difference in the total revenue earned when the product or service is sold at split-off point and the total revenue earned when the product or service is sold after further processing.

In this case, a company accidently produced 3000 defective items (MP3 Player). These 3000 defective items are offered at a rate of $8 per item by a recycler, and on the other hand these detective items can be fixed at a rate of $10 and could be sold at a regular market price of $19 per item.

The company by reworking those defective items can produce incremental revenue of $11 per unit ($19−$8). Since the cost to rework the defective items are $10 per item, and thus the company is better off by $1 per unit when it reworks these products and sells them at the regular price.

From the above explanation it is clear that option b, c and d are incorrect and only option a is correct.

Conclusion

Hence the correct option is option a.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 25, Problem 1MCQ

To determine

Identify the correct option for the given statement.

Expert Solution & Answer

Answer to Problem 1MCQ

a. Correct the defective item and sell them at the regular price.

Explanation of Solution

Incremental revenue:

Incremental revenue refers to the difference in the total revenue earned when the product or service is sold at split-off point and the total revenue earned when the product or service is sold after further processing.

In this case, a company accidently produced 3000 defective items (MP3 Player). These 3000 defective items are offered at a rate of $8 per item by a recycler, and on the other hand these detective items can be fixed at a rate of $10 and could be sold at a regular market price of $19 per item.

The company by reworking those defective items can produce incremental revenue of $11 per unit ($19−$8). Since the cost to rework the defective items are $10 per item, and thus the company is better off by $1 per unit when it reworks these products and sells them at the regular price.

From the above explanation it is clear that option b, c and d are incorrect and only option a is correct.

Conclusion

Hence the correct option is option a.

Answer 6

Chapter 25, Problem 1MCQ

To determine

Identify the correct option for the given statement.

Expert Solution & Answer

Answer to Problem 1MCQ

a. Correct the defective item and sell them at the regular price.

Explanation of Solution

Incremental revenue:

Incremental revenue refers to the difference in the total revenue earned when the product or service is sold at split-off point and the total revenue earned when the product or service is sold after further processing.

In this case, a company accidently produced 3000 defective items (MP3 Player). These 3000 defective items are offered at a rate of $8 per item by a recycler, and on the other hand these detective items can be fixed at a rate of $10 and could be sold at a regular market price of $19 per item.

The company by reworking those defective items can produce incremental revenue of $11 per unit ($19−$8). Since the cost to rework the defective items are $10 per item, and thus the company is better off by $1 per unit when it reworks these products and sells them at the regular price.

From the above explanation it is clear that option b, c and d are incorrect and only option a is correct.

Conclusion

Hence the correct option is option a.

Answer 7

Chapter 25, Problem 1MCQ

To determine

Identify the correct option for the given statement.

Answer 8

Expert Solution & Answer

Answer to Problem 1MCQ

a. Correct the defective item and sell them at the regular price.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Incremental revenue:

Incremental revenue refers to the difference in the total revenue earned when the product or service is sold at split-off point and the total revenue earned when the product or service is sold after further processing.

In this case, a company accidently produced 3000 defective items (MP3 Player). These 3000 defective items are offered at a rate of $8 per item by a recycler, and on the other hand these detective items can be fixed at a rate of $10 and could be sold at a regular market price of $19 per item.

The company by reworking those defective items can produce incremental revenue of $11 per unit ($19−$8). Since the cost to rework the defective items are $10 per item, and thus the company is better off by $1 per unit when it reworks these products and sells them at the regular price.

From the above explanation it is clear that option b, c and d are incorrect and only option a is correct.