Homework Answers
Cost of re-machining = $25,000
sale price of parts after re-machining = $30,000
Sale price if parts are scrapped = $2,500
Additional sales price if parts are re-machining = sale price of parts after re-machining - Sale price if parts are scrapped
= 30,000 - 2,500
= $27,500
Net benefit from re-machining = Additional sales price if parts are re-machining - Cost of re-machining
= 27,500 - 25,000
= $2,500
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