Question
has an inventory of 475 obsolete remote entry keys that are carried in inventory at a manufacturing cost of $76,950. Production supervisor Andy George must
has an inventory of 475 obsolete remote entry keys that are carried in inventory at a manufacturing cost of $76,950. Production supervisor Andy George must decide to do one of the following:
Process the inventory further at a cost of $22,000, with the expectation of selling it for $34,000
Scrap the inventory for a sales price of $6,000What should George do? Present figures to support your decision.
Prepare the Sell or Process Further analysis. (Enter a "0" for any zero amounts. Use a minus sign or parentheses when the scrap amount exceeds the process further amount.)
Incremental Analysis | Sell As Is | Process |
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Sell of Process Further Decision | (Scrap) | Further | Difference |
Revenues |
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Less: Extra cost of processing further |
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Net benefit (loss) to operating income |
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