1. A company has an inventory of 1,000 assorted parts for a line of missiles that has been discontinued. The inventory cost is $80,000. The parts can be either (a) remachined at total additional costs of $30,000 and then sold for $35,000, or (b) sold as scrap for $2,000. Which action should be taken. (Horngren, p. 411, 11-16)

2. A truck, costing $100,000 and uninsured, is wrecked its first day in use. It can be either (a) disposed of for $10,000 cash and replaced with a similar truck costing $102,000 or (b) rebuilt for $85,000 and thus be brand-new as far as operating characteristics and looks are concerned. What should be done? (Horngren, p. 411, 11-16)