The Lantern Corporation has $1,000$ obsolete lanterns that are carried in inventory at a manufacturing cost of $$30,000.$ If the lanterns are re$-$machined for $$4,000,$ they could be sold for $$10,000.$ Alternatively, the lanterns could be sold for scrap for $$2,000.$ Which alternative is more desirable, and what are the total relevant costs for that alternative?

Question $15$Answer

a$.$

Re$-$machine and $$34,000$

b$.$

Scrap and $$28,000$

c$.$

Scrap and $$30,000$

d$.$

Re$-$machine and $$4,000$