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Answer the following questions. 1. 2. A company has an inventory of 1,250 assorted parts for a line of missiles that has been discontinued.
Answer the following questions. 1. 2. A company has an inventory of 1,250 assorted parts for a line of missiles that has been discontinued. The inventory cost is $72,000. The parts can be either (a) remachined at total additional costs of $28,000 and then sold for $33,500 or (b) sold as scrap for $3,500. Which action is more profitable? Show your calculations. A truck, costing $103,500 and uninsured, is wrecked its first day in use. It can be either (a) disposed of for $16,500 cash and replaced with a similar truck costing $102,000 or (b) rebuilt for $84,000, and thus be brand-new as far as operating characteristics and looks are concerned. Which action is less costly? Show your calculations.
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