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Example MLC Industries, a computer manufacturer, has in its inv com entory $80,000 w orth of disk-drive housing for a The housings can be re-machined to fit a newer line at a cost of $15,000 puter line that is now obsolete. sold for $33,000. MILC Industries other alternative is to sell the housings as a scrap for $12.000. Decision Re-machine S 33,000 Scrap. $12,000 0- $12,000 Difference $21,000 15,000 s 6,000 Revenues Additional costs 15,000 Net profit $18,000