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Becalm Company has obsolete inventory of parts that cost $90,000 to manufacture. The 20,000 parts can be sold as scrap metal for $14,000, or can
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Becalm Company has obsolete inventory of parts that cost $90,000 to manufacture. The 20,000 parts can be sold as scrap metal for $14,000, or can be reworked at a cost of $30,000 and then sold for $50,000. If the firm choose to rework the parts instead of scraping them, operating income will:
increase by $36,000
increase by $6,000
decrease by $40,000
decrease by $14,000
Becalm Company has obsolete inventory of parts that cost $90,000 to manufacture. The 20,000 parts can be sold as scrap metal for $14,000, or can be reworked at a cost of $30,000 and then sold for $50,000. If the firm choose to rework the parts instead of scraping them, operating income will:
| increase by $36,000 | ||
| increase by $6,000 | ||
| decrease by $40,000 | ||
| decrease by $14,000 |
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