Chang Industries Has 2,000 Defective Units of Product That Have

question 49

Multiple Choice

Chang Industries has 2,000 defective units of product that have already cost $14 each to produce. A salvage company will purchase the defective units as they are for $5 each. Chang's production manager reports that the defects can be corrected for $6 per unit, enabling them to be sold at their regular market price of $21. Chang should:

• A) Throw the units away.
• B) Sell the units to the salvage company for $5 per unit.
• C) Sell the units as they are because repairing them will cause their total cost to exceed their selling price.
• D) Sell 1,000 units to the salvage company and repair the remainder.
• E) Correct the defects and sell the units at the regular price.

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Definitions:

Protein-Calorie Malnutrition

A nutritional deficiency state resulting from insufficient intake of proteins and calories, often leading to growth impairment and weakened immunity.

Kwashiorkor

A potentially fatal form of malnutrition in which the diet is extremely low in protein.

Independence

The state or quality of being self-reliant and free from external control or support.

On Demand

A service or system that provides goods, services, or media available to consumers as soon as they request it, often via digital means.