BT&T Corporation manufactures telephones. Recently, the company produced a batch of 630 defective telephones at...
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BT&T Corporation manufactures telephones. Recently, the company produced a batch of 630 defective telephones at a cost of $9,300. BT&T can sell these telephones as scrap for $9 each. It can also rework the entire batch at a cost of $6,800, after which the telephones could be sold for $20 per unit. If BT&T reworks the defective telephones, by how much will its operating income change?
Increase by $6,930
. Decrease by $3,500.
Increase by $5,800.
Decrease by $5,800.
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