登录之后可查看解析

Answer (C) is correct . If a different direct material is used, incremental revenue will be $1,500,000 {[300,000 units ( 12% defect rate - 2%) * $50}. Incremental cost will be $750,000 (300,000 units ¡Á $2.50). Thus, the net benefit will be $750,000 ($1,500,000 - $750,000).
Answer (A) is incorrect because The amount of $(120,000) considers only the production costs of the good units sold. Moreover, it includes fixed overhead, a cost that is not affected by the choice of materials.
Answer (B) is incorrect because The amount of $120,000 considers only the variable costs of the good units produced.
Answer (D) is incorrect because The amount of $1,425,000 includes only the incremental direct materials cost of the increase in the number of good units produced.