The Tingey Company has 500 obsolete microcomputers that are carried in inventory at a total cost of
Question:
The Tingey Company has 500 obsolete microcomputers that are carried in inventory at a total cost of $720,000. If these microcomputers are upgraded at a total cost of $100,000, they can be sold for a total of $160,000. As an alternative, the microcomputers can be sold in their present condition for $50,000.
a. The sunk cost in this situation is
b. Using the same facts as Question 16, what is the net advantage or disadvantage to the company from upgrading the computers rather than selling them in their present condition?
A. $110,000 advantage
B. $660,000 disadvantage
C. $10,000 advantage
D. $60,000 advantage
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a In this case the original cost is not relevant Therefore the original ...View the full answer
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