StarApple Company recently discontinued the manufacture of Model YPhoneX. The standard costs for this product were:

Direct Material	50
Direct Labor	20
Variable Overhead	14
Fixed Overhead	35
Total	119

There are 800 units of this model in finished-goods inventory. The units are technologically obsolete, and the following alternatives are being considered:

A. Dispose of as scrap. The proceeds from the sale will equal the cost of transportation to the disposal site.

B. Sell to an exporter for sale in developing country. The sales price to the exporter would be $12 per unit.

C. Remanufacture the products to convert them into model YPhoneXR, a model that normally sells for $200. The additional cost to convert the YPhoneX units would be 45; the standard cost to manufacture YPhoneXR is $125. Presently, there is sufficient capacity to manufacture product YPhoneXR directly or to do the necessary conversion work on YPhoneX.

QUESTIONS:

1. The current carrying value of the YPhoneX inventory is (#1) $____________

2. In evaluating each alternative, fill in the following missing information:

a. The financial benefit of Option A is (#2) $__________

b. The financial benefit of Option B is (#3) $__________

c. Converting YPhoneX into XR is (more or less?) (#4) ___________ beneficial than manufacturing YPhoneXR by (#5) $______ per unit.

d. Therefore, the alternative that offers the most financial benefit is Option (A, B, or C?) (#6) ______, and it will increase operating income by (#7) $________