Vident Ltd has 1,000 commercial frozen ice machines in inventory produced at a cost of $4,000 each (60% variable and 40% fixed). The machines were to have been sold for $10,000 each. However, the machines currently contain a minor malfunction, reducing their selling price to $1,500 each. The company could correct the malfunction at a variable cost of $2,500 each, and then sell the machines for $5,500 each. If the games are reworked, what will be the contribution per unit from doing so?
A) $3,500
B) $3,000
C) $1,500
D) $1,000

Question

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The Answer of Vident Ltd has 1,000 commercial frozen ice machines in inventory produced at a cost of $4,000 each (60% variable and 40% fixed). The machines were to have been sold for $10,000 each. However, the machines currently contain a minor malfunction, reducing their selling price to $1,500 each. The company could correct the malfunction at a variable cost of $2,500 each, and then sell the machines for $5,500 each. If the games are reworked, what will be the contribution per unit from doing so?
A) $3,500
B) $3,000
C) $1,500
D) $1,000

Vident Ltd Has 1,000 Commercial Frozen Ice Machines in Inventory