Ahngram Corp has 1000 defective units of a product that cost

Ahngram Corp. has 1,000 defective units of a product that cost $3.70 per unit in direct costs and $7.20 per unit in indlrect cost when produced last year. The units can be sold as scrap for $4.70 full price of $14.10. The incremental net income (loss) from the choice of reworking the units would be per unit or reworked at an addftional cost of $3.20 and sold at

Solution

Here, the incremental net income from reworking is that the amount of profit the company earns by reworking the units

The cost of the unit = 3.70 (direct cost) + 7.20 ( indirect costs) + 3.20 ( reworking costs) = 14.10

Since the selling price is equal to cost there is zero incremental income or loss.

Answer is B = $0