Homework Help is Here – Start Your Trial Now!
Business
Accounting
Answer the following questions. 1. A company has an inventory of 1,150 assorted parts for a line of missiles that has been discontinued. The inventory cost is $79,000. The parts can be either (a) remachined at total additional costs of $25,000 and then sold for $34,000 or (b) sold as scrap for $6,000. Which action is more profitable? Show your calculations. 2. A truck, costing $100,000 and uninsured, is wrecked its first day in use. It can be either (a) disposed of for $18,000 cash and replaced with a similar truck costing $102,000 or (b) rebuilt for $85,500, and thus be brand-new as far as operating characteristics and looks are concerned. Which action is less costly? Show your calculations. 1. A company has an inventory of 1,150 assorted parts for a line of missiles that has been discontinued. The inventory cost is $79,000. The parts can be either (a) remachined at total additional costs of $25,000 and then sold for $34,000 or (b) sold as scrap for $6,000. Which action is more profitable? Show your calculations. (Only complete the necessary answer boxes.) (b) (a) Remachine Scrap Deduct: Operating income

Answer the following questions. 1. A company has an inventory of 1,150 assorted parts for a line of missiles that has been discontinued. The inventory cost is $79,000. The parts can be either (a) remachined at total additional costs of $25,000 and then sold for $34,000 or (b) sold as scrap for $6,000. Which action is more profitable? Show your calculations. 2. A truck, costing $100,000 and uninsured, is wrecked its first day in use. It can be either (a) disposed of for $18,000 cash and replaced with a similar truck costing $102,000 or (b) rebuilt for $85,500, and thus be brand-new as far as operating characteristics and looks are concerned. Which action is less costly? Show your calculations. 1. A company has an inventory of 1,150 assorted parts for a line of missiles that has been discontinued. The inventory cost is $79,000. The parts can be either (a) remachined at total additional costs of $25,000 and then sold for $34,000 or (b) sold as scrap for $6,000. Which action is more profitable? Show your calculations. (Only complete the necessary answer boxes.) (b) (a) Remachine Scrap Deduct: Operating income

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 7E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...
See similar textbooks
icon
Related questions
Question

1

Answer the following questions. 1. A company has an inventory of 1,150 assorted parts for a line of missiles that has been discontinued. The inventory cost is $79,000. The parts can be either (a) remachined at total additional costs of $25,000 and then sold for $34,000 or (b) sold as scrap for $6,000. Which action is more profitable? Show your calculations. 2. A truck, costing $100,000 and uninsured, is wrecked its first day in use. It can be either (a) disposed of for $18,000 cash and replaced with a similar truck costing $102,000 or (b) rebuilt for $85,500, and thus be brand-new as far as operating characteristics and looks are concerned. Which action is less costly? Show your calculations. 1. A company has an inventory of 1,150 assorted parts for a line of missiles that has been discontinued. The inventory cost is $79,000. The parts can be either (a) remachined at total additional costs of $25,000 and then sold for $34,000 or (b) sold as scrap for $6,000. Which action is more profitable? Show your calculations. (Only complete the necessary answer boxes.) (b) (a) Remachine Scrap Deduct: Operating income
Transcribed Image Text:Answer the following questions. 1. A company has an inventory of 1,150 assorted parts for a line of missiles that has been discontinued. The inventory cost is $79,000. The parts can be either (a) remachined at total additional costs of $25,000 and then sold for $34,000 or (b) sold as scrap for $6,000. Which action is more profitable? Show your calculations. 2. A truck, costing $100,000 and uninsured, is wrecked its first day in use. It can be either (a) disposed of for $18,000 cash and replaced with a similar truck costing $102,000 or (b) rebuilt for $85,500, and thus be brand-new as far as operating characteristics and looks are concerned. Which action is less costly? Show your calculations. 1. A company has an inventory of 1,150 assorted parts for a line of missiles that has been discontinued. The inventory cost is $79,000. The parts can be either (a) remachined at total additional costs of $25,000 and then sold for $34,000 or (b) sold as scrap for $6,000. Which action is more profitable? Show your calculations. (Only complete the necessary answer boxes.) (b) (a) Remachine Scrap Deduct: Operating income
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Financial Reporting in Hyperinflationary Economies
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Cost Accounting
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS