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Question
Chang Industries has 2,000 defective units of product that have already cost $14 each to produce. A salvage company will purchase the defective units as they are for $5 each. Chang's production manager reports that the defects can be corrected for $6 per unit, enabling them to be sold at their regular market price of $21. The incremental income or loss on reworking the units is:A.$20,000 loss.
B.$20,000 income.
C.$12,000 loss.
D.$32,000 income.
E.$30,000 income.
Answer
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