Scrap or rework a defective unit
WebWalloon Company produced 150 defective units last month at a unit manufacturing cost of 30. The defective units were discovered before leaving the plant. Walloon can sell them as is for 20 or can rework them at a cost of 15 and sell them at the regular price of 50. What is the total relevant cost of reworking the defective units? a. WebRework—units of production that do not meet the specifications required by customers but which are subsequently repaired and sold as good finished units. Scrap—residual material that results from manufacturing a product. It has low total sales value compared to the total sales value of the product. "Normal spoilage is planned spoilage." Discuss.
Scrap or rework a defective unit
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WebIt can also rework the entire batch at a cost of $6,500, after which the telephones could be sold for $20 per unit. If BT&T reworks the defective telephones, by how much will its operating income change? scrap = 5,400 Rebuild = 12,000 - 6,500 = 5,500 5,500 - 5,400 = 100 Increase of $100 to rebuild. WebA company must decide between scrapping or reworking units that do not pass inspection. The company has 22,000 defective units that cost $6 per unit to manufacture. The units can be sold, as...
WebA company must decide between scrapping or reworking units that do not pass … WebMay 13, 2024 · Road Master Shocks has 15,000 units of a defective product on hand that …
WebRework—units of production that do not meet the specifications required by customers but …
WebScrap includes all of the following except: A. the trimmings remaining after processing materials B. defective materials that cannot be used or returned to the vendor C. partially or fully completed units that are in some way defective D. broken parts resulting from employee or machine failures E. all of the above. ... Rework cost per unit ...
WebSep 6, 2015 · Defectives may arise due to the following reasons: 1. Sub-standard materials. 2. Poor workmanship. 3. Poor maintenance of machines. 4. Wrong tool setting. 5. Faulty design of products. 6. Bad... cohen benjamin raymond james \u0026 associatesWebApr 30, 2024 · Answer: Explanation: Defective units = 16000 Cost of manufacture =92800 When sold as scrap Revenue = 16000*3= $48000 Net income = $48000 When reworked and sold Cost of rework = 4.7* 16000= 75200 Revenue = 8.8*16000= 140800 Net income = 65,600 It is better to rework and sell. Incremental income on reworking and selling is … cohen berg \u0026 coWebThe company has 13,000 defective units that have already cost $132,000 to manufacture. … cohen berg cpaWebSort Defective materials & decide whether a Clean room Manufacturing-material has to be scrap or Rework. Inspects Batch production& work order & approves & correct any mistakes. Types 30 words per ... cohen bereniceWebSale as Scrap Rework Incremental income (loss) The company should: Question A … dr judith waters strongsvilleWebExercise 23-6 Scrap or rework A1 A company must decide between scrapping or reworking units that do not pass inspection. The company has 22,000 defective units that cost $6 per unit to manufacture. The units can be sold as is for $2.50 each, or they can be reworked for $4.50 each and then sold for the full price of $8.50 each. dr judith westrick lincoln riWebExercise 23-4 (Algo) Scrap or rework LO P2 A company must decide between scrapping or reworking units that do not pass inspection. The company has 13,000 defective units that have already cost $132,000 to manufacture. The units can be sold as scrap for $45,500 or reworked for $65,000 and then sold for $119,600. cohen bed bath beyond