Stoog Enterprises Manufactures Ceiling Fans That Normally Sell for $90

Stoog Enterprises manufactures ceiling fans that normally sell for $90 each. There are 300 defective fans in inventory, which cost $55 each to manufacture. These defective units can be sold as is for $20 each, or they can be processed further for a cost of $40 each and then sold for the normal selling price. Stoog Enterprises would be better off by a

A) $21,000 net increase in operating income if the ceiling fans are repaired.
B) $9,000 net increase in operating income if the ceiling fans are sold as is.
C) $9,000 net increase in operating income if the ceiling fans are repaired.
D) $21,000 net increase in operating income if the ceiling fans are sold as is.

Correct Answer:

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