Question

McPupper Steel has products that can be sold as is for $13,000 as is, or could be reworked at a cost of $3,400 and sold for $16,000. What would be the incremental profit or (loss) of reworking and selling the products instead of selling them as is?

Answer 1

Answer:

It is more profitable to sell the product as it is.

Explanation:

Giving the following information:

McPupper Steel has products that can be sold for $13,000, or could be reworked at a cost of $3,400 and sold for $16,000.

To calculate the convenience of continue processing the product, we need to deduct from the final selling price the rework costs and compare it to the original price.

Effect on income= 16,000 - 3,400= $12,600

It is more profitable to sell the product as it is.