question archive A company has an inventory of 1,300 assorted parts for a line of missiles that has been discontinued
A company has an inventory of 1,300 assorted parts for a line of missiles that has been discontinued
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A company has an inventory of 1,300 assorted parts for a line of missiles that has been discontinued. The inventory cost is $71,000. The parts can be either
(a) remachined at total additional costs of $27,500 and then sold for $31,500 or
(b) sold as scrap for $6,000. Which action is more profitable? Show your calculations
Option 1
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Option 2
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