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Answer the following questions. 1. 2. A company has an inventory of 1,050 assorted parts for a line of missiles that has been discontinued.

 

Answer the following questions. 1. 2. A company has an inventory of 1,050 assorted parts for a line of missiles that has been discontinued. The inventory cost is $73,000. The parts can be either (a) remachined at total additional costs of $25,500 and then sold for $32,500 or (b) sold as scrap for $2,500 Which action is more profitable? Show your calculations. A truck, costing $104,500 and uninsured, is wrecked its first day in use. It can be either (a) disposed of for $16,000 cash and replaced with a similar truck costing $106,000 or (b) rebuilt for $82,000, and thus be brand-new as far as operating characteristics and looks are concemed. Which action is less costly? Show your calculations

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