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Federar Corporation sells miniature cars made of aluminium. It has 10,000 cars in inventory (that cost $5.00 per unit to produce) that are not suitable
Federar Corporation sells miniature cars made of aluminium. It has 10,000 cars in inventory (that cost $5.00 per unit to produce) that are not suitable to sell because of quality problems. Federar has three options: (1) Write off the inventory as obsolete and dispose them safely at a cost $0.30 per unit. (2) Re-work all the cars at a cost of $3 per car and sell them to outlet stores at a unit price of $3.30. (3) Sell the cars to a scrap dealer for $0.20 per unit (4) Melt the cars and use the aluminium content in current production that can save raw material cost of $1,200 in next month's production. Select all statements, from among the five statements given below, that are true. |
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