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Ahngram Corp. has 1,000 defective units of a product that cost $2.30 per unit in...

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Accounting

Ahngram Corp. has 1,000 defective units of a product that cost $2.30 per unit in direct costs and $5.80 per unit in indirect cost when produced last year. The units can be sold as scrap for $3.30 per unit or reworked at an additional cost of $1.80 and sold at full price of $9.90. The incremental net income (loss) from the choice of reworking the units would be:

Multiple Choice

  • $3,300.

  • $0.

  • ($1,800).

  • $8,100.

  • $1,800.

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