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Ahngram Corp. has 1,000 defective units of a product that cost $2.60 per unit in direct...

Ahngram Corp. has 1,000 defective units of a product that cost $2.60 per unit in direct costs and $6.10 per unit in indirect cost when produced last year. The units can be sold as scrap for $3.60 per unit or reworked at an additional cost of $2.10 and sold at full price of $10.80. The incremental net income (loss) from the choice of reworking the units would be:

Multiple Choice

  • A. $0.

  • B. $2,100.

  • C. $3,600.

  • D. ($2,100).

  • E.    $8,700.

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