Wave-Zone Company has 10,000 units of its sole product that it produced last year at a cost of $50 each. This year's model is superior to last year's and the 10,000 units cannot be sold 4. for their regular selling price of $75 each. Wave-Zone has two alternatives for these items (1) they can be sold to a wholesaler for $5 each, or (2) they can be reworked at a total cost of $190,000 and then sold for $22.50 each. The company has enough idle capacity to rework these items without affecting any new production. Which choice would increase the company's profits the most? a) Reworking, because profit will increase by $35,000 more than scrapping Scrapping, because profit will increase by $50,000 more than reworking. b) c) Reworking, because profit will increase by $15,000 more than scrapping. d) Scrapping, because profit will increase by $15,000 more than reworking e) Reworking because profit will increase by $50,000 more than scrapping 5. Roxie Company has 17,500 units of its sole product that it produced last year at a cost of $45 each. This year's model is superior to last year's and the 17,500 units cannot be sold for their regular selling price of $80 each. Roxie has two alternatives for these items: (1) they can be sold to a wholesaler for $35 each, or (2) they can be reworked at a total cost of $450,000 and then sold for $60 each. The company has enough idle capacity to rework these items without affecting any new production. Which ch a) Reworking, because profit will increase by $600,000 more than scrapping. b) Scrapping, because profit will increase by $612,500 more than reworking c) Reworking, because profit will increase by $12,500 more than scrapping d) Scrapping, because profit will increase by $12,500 more than reworking. oice would increase the company's profits the most? e) Reworking because profit will increase by $450,000 more than scrapping A company has already incurred a $24,000 cost in partially producing its two products. Their selling prices when partially and fully processed are shown in the following table with the additional costs necessary to finish their processing. Based on this information, should any products be processed further? 6. Unfinished Selling Price Finished Selling Price Further Processing Costs Product $900 600 $1,000 $65 675 76 a) Both product A and product B should be processed further. b) Neither product A nor product B should be processed further. c) Only product B should be processed further. d) Only product A should be processed further. e) A processing further decision cannot be made from the available data