Harold Manufacturing produces denim clothing. This year, it produced 5,210 denim

Question

Harold Manufacturing produces denim clothing. This year, it produced 5,210 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 second-hand clothing shop for $7.00 each. Jackets can be disassembled at a cost of $31,800 and sold to a recycler for $12.00 each. 2. 3. Jackets can be reworked and turned into good jackets. However, with the damage, management estimates it will be able to assemble the good parts of the 5,210 jackets into only 3,050 jackets. The remaining pieces of fabric will be discarded. The cost of reworking the jackets will be $101,400, but the jackets c4a then be sold for their regular price of $45.00 each. Required: 1. Calculate the incremental income.

Explanation / Answer

Alternative 1 Alternative 2 Alternative 3 Increamental Revenue 5210*7          36,470 5210*12          62,520 3050*45          137,250 Increamental Cost                                -                      (31,800)                    (101,400) Increamental Income                      36,470                      30,720                        35,850

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.