Wasson Widget Has 1,000 Obsolete Widgets on Hand

question 71

Multiple Choice

Wasson Widget has 1,000 obsolete widgets on hand. These units were produced a year ago at a cost of $10,000. The units could be scrapped for $1,000 or reworked for $2,000 and sold for $5,000. Which alternative is desirable and why?

• A) Scrap, profit of $1,000 is higher than the other option
• B) Rework, incremental loss $7,000
• C) Rework, profit of $3,000 is higher than the other option
• D) Scrap, incremental loss $9,000

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Definitions:

HR Decisions

Decisions made by the human resources department or professionals concerning employee management, including hiring, training, performance evaluation, promotions, and terminations.

Job Re-design

The process of altering a job setup to improve employee satisfaction, boost performance, or adapt to changing conditions.

Performance Management Systems

Systems designed to improve and maintain employee performance through goal-setting, feedback, and coaching.

Proactive

An approach characterized by taking initiative and action to prevent problems before they arise, rather than reacting to them after they occur.