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Hip Manufacturing produces denim clothing. This year it produced 3,000 denim jackets at a cost of $90,000. These jackets were damaged in the warehouse during storage Management identified three alternatives for these jackets. 1. Jackets can be sold as scrap to a secondhand clothing shop for $18,000 2. Jackets can be disassembled at a cost of $6,000 and sold to a recycler for $36,000. 3. Jackets can be reworked and turned into good jackets. The cost of reworking the jackets will be $102.000, and the jackets can then be sold for $135,000 Required: (1) Compute the income for each alternative. (2) Which alternative should be chosen? Scrap, Recycle or Rework Analysis Revenue from scraphecycle/rework Scrap Recycle Rework

Hip Manufacturing produces denim clothing. This year it produced 3,000 denim jackets at a cost of $90,000. These jackets were damaged in the warehouse during storage Management identified three alternatives for these jackets. 1. Jackets can be sold as scrap to a secondhand clothing shop for $18,000 2. Jackets can be disassembled at a cost of $6,000 and sold to a recycler for $36,000. 3. Jackets can be reworked and turned into good jackets. The cost of reworking the jackets will be $102.000, and the jackets can then be sold for $135,000 Required: (1) Compute the income for each alternative. (2) Which alternative should be chosen? Scrap, Recycle or Rework Analysis Revenue from scraphecycle/rework Scrap Recycle Rework

Essentials of Business Analytics (MindTap Course List)
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter11: Linear Optimization Models
Section: Chapter Questions
Problem 7P: Vollmer Manufacturing makes three components for sale to refrigeration companies. The components are...
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Hip Manufacturing produces denim clothing. This year it produced 3,000 denim jackets at a cost of $90,000. These jackets were damaged in the warehouse during storage Management identified three alternatives for these jackets. 1. Jackets can be sold as scrap to a secondhand clothing shop for $18,000 2. Jackets can be disassembled at a cost of $6,000 and sold to a recycler for $36,000. 3. Jackets can be reworked and turned into good jackets. The cost of reworking the jackets will be $102,000, and the jackets can then be sold for $135,000 Required: (1) Compute the income for each alternative. (2) Which alternative should be chosen? Scrap, Recycle or Rework Analysis Revenue from scrap/recycle/rework Cost of recycled/reworked units Income $ Scrap 0$ Recycle ✪ 0 $ Rework 0
Transcribed Image Text:Hip Manufacturing produces denim clothing. This year it produced 3,000 denim jackets at a cost of $90,000. These jackets were damaged in the warehouse during storage Management identified three alternatives for these jackets. 1. Jackets can be sold as scrap to a secondhand clothing shop for $18,000 2. Jackets can be disassembled at a cost of $6,000 and sold to a recycler for $36,000. 3. Jackets can be reworked and turned into good jackets. The cost of reworking the jackets will be $102,000, and the jackets can then be sold for $135,000 Required: (1) Compute the income for each alternative. (2) Which alternative should be chosen? Scrap, Recycle or Rework Analysis Revenue from scrap/recycle/rework Cost of recycled/reworked units Income $ Scrap 0$ Recycle ✪ 0 $ Rework 0
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