Several finished products are listed in the inventory account. One such product, X444, is carried at the cost of $300,000 and consists of 10,000 units The sales manager informs the financial director that x444 has become obsolete and can only be sold for $5 per unit. The plant manager informs the financial director that for an additional $7.50 per unit, X444 can be updated and sold for $12 per unit. if you were the financial director, your decision would be Answers A-D A to sell the whole lot for $50.000 and record an accounting loss for $250,000 B to update X444 at the additional cost of $75,000 and sell the lot for $120,000 C to record the current value of the lot to be $125,000 (ie, ($5.00+ $7.50)/unit). Oto wait for a better alternative to be proposed in due course.

Several finished products are listed in the inventory account. One such product, X444, is carried at the cost of $300,000 and consists of 10,000 units The sales manager informs the financial director that x444 has become obsolete and can only be sold for $5 per unit. The plant manager informs the financial director that for an additional $7.50 per unit, X444 can be updated and sold for $12 per unit. if you were the financial director, your decision would be Answers A-D A to sell the whole lot for $50.000 and record an accounting loss for $250,000 B to update X444 at the additional cost of $75,000 and sell the lot for $120,000 C to record the current value of the lot to be $125,000 (ie, ($5.00+ $7.50)/unit). Oto wait for a better alternative to be proposed in due course.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2EA: A company started a new product, and in the first month started 100,000 units. The ending work in...

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