Garcia Company has 10,000 units of its product that were produced last year at a
ID: 2461405 • Letter: G
Question
Garcia Company has 10,000 units of its product that were produced last year at a total cost of $150,000. The units were damaged in a rain storm because the warehouse where they were stored developed a leak in the roof. Garcia can sell the units as is for $2 each or it can repair the units at a total cost of $18,000 and then sell them for $5 each.
Calculate the incremental net income if the units are repaired
Garcia Company has 10,000 units of its product that were produced last year at a total cost of $150,000. The units were damaged in a rain storm because the warehouse where they were stored developed a leak in the roof. Garcia can sell the units as is for $2 each or it can repair the units at a total cost of $18,000 and then sell them for $5 each.
Process further Incremental Net Income Sell as is Sales Additional processing costs TotalExplanation / Answer
Details Sell As is Process Further Incremental Net income Sales 20,000.00 50,000.00 30,000.00 Additional Processing cost - 18,000.00 18,000.00 Total 20,000.00 32,000.00 12,000.00
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