=+8-16 K Disposal of assets OBJECTIVES 2, 7 Answer the following questions.

1 A company has an inventory of 1100 assorted parts for a line of engines that has been discontinued. The inventory cost is

$78000. The parts can be either:

(a) re-machined at total additional costs of $24500 and then sold for $33000 or

(b) sold as scrap for $6500. Which action is more profitable? Show your calculations.