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chang industries has 2,600 defective units of product that have already cost $14.60 each to produce. a salvage company will purchase the defective units as they are for $5.60 each. chang's production manager reports that the defects can be corrected for $5.40 per unit, enabling them to be sold at their regular market price of $22.20. the incremental income or loss on reworking the units is:

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If chang industries has 2,600 defective units of product that have already cost $14.60 each to produce.  the incremental income or loss on reworking the units is: $29,120.

How to find the incremental income?

Incremental revenue = $22.20 - $5.60

Incremental revenue = $16.60

Incremental Income from reworking =$16.60 - $5.40

Incremental Income from reworking =$11.20

Total incremental income from reworking = $11.20 × 2,600

Total incremental income from reworking= $29,120

Therefore the incremental income or loss on reworking the units is: $29,120.

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