A company has the choice of either selling 600 defective units as scrap or rebuilding them. The company could sell the defective units as they are for $2.00 per unit. Alternatively, it could rebuild them with incremental costs of $0.60 per unit for materials, $1.00 per unit for labor, and $0.80 per unit for overhead, and then sell the rebuilt units for $5.00 each. What is the amount of incremental cost from rebuilding?
A) $3.00 per unit.
B) $5.00 per unit.
C) $7.00 per unit.
D) $2.40 per unit.
E) $0.60 per unit.

Question

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The Answer of A company has the choice of either selling 600 defective units as scrap or rebuilding them. The company could sell the defective units as they are for $2.00 per unit. Alternatively, it could rebuild them with incremental costs of $0.60 per unit for materials, $1.00 per unit for labor, and $0.80 per unit for overhead, and then sell the rebuilt units for $5.00 each. What is the amount of incremental cost from rebuilding?
A) $3.00 per unit.
B) $5.00 per unit.
C) $7.00 per unit.
D) $2.40 per unit.
E) $0.60 per unit.

A Company Has the Choice of Either Selling 600 Defective