The Lantern Corporation has $1,000$ obsolete lanterns that are carried in inventory at a manufacturing cost of $$25,000.$ If the lanterns are re$-$machined for $$6,000,$ they could be sold for $$8,000.$ Alternatively, the lanterns could be sold for scrap for $$500.$ Which alternative is more desirable, and what are the total relevant costs for that alternative?

Question $15$Answer

a$.$

Re$-$machine and $$6,000$

b$.$

Re$-$machine and $$31,000$

c$.$

Scrap and $$25,000$

d$.$

Scrap and $$24,500$