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?

Question

Business

Melvin Jackson

3 July, 09:22

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?

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Answers (1)

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Terrell Stout · Answer 1

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.