Fone Zone Corporation manufactures telephones. Recently, the company produced a batch of 570 defective telephones...
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Accounting
Fone Zone Corporation manufactures telephones. Recently, the company produced a batch of 570 defective telephones at a cost of $8,700. Fone Zone can sell these telephones as scrap for $10 each. It can also rework the entire batch at a cost of $6,200, after which the telephones could be sold for $21 per unit.
If Fone Zone reworks the defective telephones, by how much will its operating income change?
Multiple Choice
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Increase by $5,770
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Increase by $6,270
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Decrease by $2,930
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Decrease by $5,770
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