HomeworkLib
Question

Ahngram Corp. has 1,000 defective units of a product that cost $2.30 per unit in direct costs and $5.80 per unit in indi...

Ahngram Corp. has 1,000 defective units of a product that cost $2.30 per unit in direct costs and $5.80 per unit in indirect cost when produced last year. The units can be sold as scrap for $3.30 per unit or reworked at an additional cost of $1.80 and sold at full price of $9.90. The incremental net income (loss) from the choice of reworking the units would be:

Multiple Choice

  • $3,300.

  • $0.

  • ($1,800).

  • $8,100.

  • $1,800.

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Number of defective units = 1,000

Direct cost = $2.30

Indirect cost = $5.80

Cost of rework = $1.80 per unit

Selling price per unit after rework = $9.90 per unit

Total cost per unit = Direct cost per unit + Indirect cost per unit + Cost of rework

= 2.30+5.80+1.80

= $9.90

Total incremental gain after rework = (selling price per unit after rework - Total cost per unit ) x Number of units

= (9.90-9.90) x 1,000

= $0

Second option is correct option.

Kindly comment if you need further assistance. Thanks‼!

0 0
Add a comment
Know the answer?
Add Answer to:
Ahngram Corp. has 1,000 defective units of a product that cost $2.30 per unit in direct costs and $5.80 per unit in indi...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Ahngram Corp. has 1,000 defective units of a product that cost $3.90 per unit in direct...

    Ahngram Corp. has 1,000 defective units of a product that cost $3.90 per unit in direct costs and $7.40 per unit in indirect cost when produced last year. The units can be sold as scrap for $4.90 per unit or reworked at an additional cost of $3.40 and sold at full price of $14.70. The incremental net income (loss) from the choice of reworking the units would be: Multiple Choice $3,400. $11,300. $0. $4,900. ($3,400).

  • Ahngram Corp. has 1,000 defective units of a product that cost $3 per unit in direct...

    Ahngram Corp. has 1,000 defective units of a product that cost $3 per unit in direct costs and $6.50 per unit in indirect cost when produced last year. The units can be sold as scrap for $4 per unit or reworked at an additional cost of $2.50 and sold at full price of $12. The incremental net income (loss) from the choice of reworking the units would be:

  • Maxim manufactures a cat food product called Green Health. Maxim currently has 10,000 bags of Green...

    Maxim manufactures a cat food product called Green Health. Maxim currently has 10,000 bags of Green Health on hand. The variable production costs per bag are $2.10 and total fixed costs are $10,000. The cat food can be sold as it is for $9.35 per bag or be processed further into Premium Green and Green Deluxe at an additional $2,300 cost. The additional processing will yield 10,000 bags of Premium Green and 3,300 bags of Green Deluxe, which can be...

  • 1)- Factor Co. can produce a unit of product for the following costs: Direct material $...

    1)- Factor Co. can produce a unit of product for the following costs: Direct material $ 8.70 Direct labor 24.70 Overhead 43.50 Total costs per unit $ 76.90 An outside supplier offers to provide Factor with all the units it needs at $44.45 per unit. If Factor buys from the supplier, the company will still incur 70% of its overhead. Factor should choose to: 2)- Maxim manufactures a cat food product called Green Health. Maxim currently has 10,000 bags of...

  • Ahngram Corp. has 1,000 carton of oranges that cost $10 per carton in direct costs and $16.50 per carton in indirect cos...

    Ahngram Corp. has 1,000 carton of oranges that cost $10 per carton in direct costs and $16.50 per carton in indirect costs and sold for $30 per carton. The oranges can be processed further into orange juice at an additional cost of $12.50 and sold at a price of $46. The incremental income (loss) from processing the oranges into orange juice would be: Multiple Choice $30,500. $22,500. ($30,500). $33,500. $23,500.

  • Exercise 10-6 Scrap or rework LO A1 A company must decide betwee that cost $5.40 per...

    Exercise 10-6 Scrap or rework LO A1 A company must decide betwee that cost $5.40 per unit to manufacture. The units can be sold for the full price of $8.70 each. If the units are sold as is, the company will be able to build 16,000 replacement units at a cost of n scrapping or reworking units that do not pass inspection. The company has 16,000 defective units sold as is for $3.30 each, or they can be reworked for...

  • A company must decide between scrapping or reworking units that do not pass Inspection. The company...

    A company must decide between scrapping or reworking units that do not pass Inspection. The company has 13.000 defective units that cost $6.00 per unit to manufacture. The units can be sold as is for $3.40 each, or they can be reworked for $4.70 each and then sold for the full price of $9.40 each. If the units are sold as is, the company will be able to build 13,000 replacement units at a cost of $6.00 each, and sell...

  • A company must decide between scrapping or reworking units that do not pass inspection. The company...

    A company must decide between scrapping or reworking units that do not pass inspection. The company has 16,000 defective units that cost $5.40 per unit to manufacture. The units can be sold as is for $2.80 each, or they can be reworked for $4.50 each and then sold for the full price of $8.20 each. If the units are sold as is, the company will be able to build 16,000 replacement units at a cost of $5.40 each, and sell...

  • A company with excess capacity must decide between scrapping or reworking units that do not pass...

    A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 16,000 defective units that cost $5.90 per unit to manufacture. The units can be a) sold as is for $2.90 each, or b) reworked for $4.60 each and then sold for the full price of $8.80 each. What is the incremental income from selling the units as scrap and reworking and selling the units? Should the company sell the units...

  • A company with excess capacity must decide between scrapping or reworking units that do not pass...

    A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 16,000 defective units that cost $5.30 per unit to manufacture. The units can be a) sold as is for $3.50 each, or b) reworked for $470 each and then sold for the full price of $8.80 each What is the incremental income from selling the units as scrap and reworking and selling the units? Should the company sell the units...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT