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Firefox File Edit View History Bookmarks Tools Window Help ???95% H, Sat 6:37 PM Atika Ishtiaq a E Oracle PeopleSoft Sign-in hcc canvas-Goog!@ Search × Accounting question l Chegg. × ¢? https://newconnect.mheducation.com/flow/connect.html .Search Ch 10 P 10-4A 6 Saved Help Save & Exit Submit Signes Check my work Problem 10-4A Sell or process LO A1 6 points Harold Manufacturing produces denim clothing. This year, it produced 5,200 denim jackets at a manufacturing cost of $42.00 each. These jackets were damaged in the warehouse during storage. Management investigated the matter and identified three alternatives for these jackets. 1. Jackets can be sold to a secondhand clothing shop for $8.00 each. 2. Jackets can be disassembled at a cost of $31,800 and sold to a recycler for $12.00 each. 3. Jackets can be reworked and turned into good jackets. However, with the damage, management estimates it will be able to Ask Print assemble the good parts of the 5,200 jackets into only 3,020 jackets. The remaining pieces of fabric will be discarded. The cost of reworking the jackets will be $102,700, but the jackets can then be sold for their regular price of $44.00 each. Required: 1. Calculate the incremental income Sell to a second- Rework and sell at Disassemble and sell to a hand s ler ular Incremental revenue Incremental costs Incremental income Graw Prev 1of 1111 Next 988

Explanation / Answer

Alt 1 Sell Alt 2 Alt 3 as is Disassemble Rework & sell Incremental revenue 41600 62400 132880 Incremental costs 31,800 102,700 Incremental income 41,600 30,600 30,180 The company should choose Alternative 1 revenue 5200*8 5200*12 3020*44 costs

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