Patrick Corporation Inadvertently Produced 10,000 Defective Personal Radios

question 33

Multiple Choice

Patrick Corporation inadvertently produced 10,000 defective personal radios. The radios cost $8 each to produce. A salvage company will purchase the defective units as they are for $3 each. Patrick's production manager reports that the defects can be corrected for $5 per unit, enabling them to be sold at their regular market price of $12.50. Patrick should:

• A) Sell the radios for $3 per unit.
• B) Correct the defects and sell the radios at the regular price.
• C) Sell the radios as they are because repairing them will cause their total cost to exceed their selling price.
• D) Sell 5,000 radios to the salvage company and repair the remainder.
• E) Throw the radios away.

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Definitions:

Good Continuation

A Gestalt principle of perceptual organization that states that elements that appear to follow in the same direction are more likely to be seen as a continuous whole.

Contiguity

A principle of learning based on the idea that events occurring together in time or space are readily associated with each other.

Ossicles

The three small bones in the middle ear (the malleus, incus, and stapes) that transmit sound vibrations from the eardrum to the inner ear.

Latin Names

The system of naming living organisms and diseases with Latin or Latinized words, used for scientific classification in taxonomy and medicine.