Question 10. Relevant costs. Chapelwoods Ltd recently discontinued the manufacture of product Z24. The standard costs for this product were: Direct materials $100 Direct labour $25 Variable overhead $50 Fixed overhead $75 Total $250 Presently there are 500 units of this product in the finished goods inventory. The product is technologically obsolete. Three alternatives have been developed for these units: 1. Dispose of as scrap; the proceeds from the sale as scrap will approximately equal the cost of transportation to the disposal site. 2. Sell to an exporter for sale in a developing country where these units would not be obsolete. The selling price to the exporter would be $15 per unit. 3. Re-manufacture the products to convert them into model Z42. This model normally sells for $400. The additional cost to convert the Z24 units would be $200. The standard cost to manufacture Z24 is $180. Presently, there is sufficient capacity to meet the market demand for product Z42. REQUIRED: 1. Determine the present carrying value of the inventory of Z24. 2. Determine the net benefit of each of the alternatives. (Ignore income tax effects.) 3. Assume in alternative 3 that there is insufficient manufacturing capacity to meet the market demand for model Z42. How does this affect your answer to (2)?