A Company Inadvertently Produced 6,000 Defective Portable Radios

Essay

A company inadvertently produced 6,000 defective portable radios. The radios cost $10 each to be manufactured. A salvage company will purchase the defective units as they are for $8 each. The production manager reports that the defects can be corrected for $4.50 per unit, enabling the company to sell them at the regular price of $15.00. The repair operations would not affect other production operations. Prepare an analysis that shows which action should be taken.