Mc qu. 76 ahngram corp. ahngram corp. has 1,000 defective units of a product that cost $3.60 per unit in direct costs and $7.10 per unit in indirect cost when produced last year. the units can be sold as scrap for $4.60 per unit or reworked at an additional cost of $3.10 and sold at full price of $13.80. the incremental net income (loss) from the choice of reworking the units would be:

It is more profitable to continue processing.

Explanation:

Giving the following information:

Ahngram Corp. has 1,000 defective units of a product that cost $3.60 per unit in direct costs and $7.10 per unit in indirect cost when produced last year. The units can be sold as scrap for $4.60 per unit or reworked at an additional cost of $3.10 and sold at the full price of $13.80.

We have to determine whether it is more convenient to sell as it is, or continue processing.

Sell now:

Effect on income= 1,000*4.6 - 1,000*(3.6 + 7.10)= -$6,100

Continue processing:

Effect on income= 1,000*13.8 - 1,000*(10.7 + 3.10)= 0

It is more profitable to continue processing.

D, the owner controls the best decision is your answer.  Taxes are based off of the amount of money made, so it can't be A.  There are still the same amount of regulations, regardless if there is only 1 person running the company or 20.  If anything, C would be a disadvantage, since the losses wouldn't be split between people.