A company has inventory that cost $50,000. Its scrap value is $65,000. The inventory could be sold for $150,000 if manufactured further at an additional cost of $80,000. What should this company do?

Question

Business

Ringo

8 March, 03:24

A company has inventory that cost $50,000. Its scrap value is $65,000. The inventory could be sold for $150,000 if manufactured further at an additional cost of $80,000. What should this company do?

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Answers (1)

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Dylan Calderon · Answer 1

It is more profitable to continue processing.

Explanation:

Giving the following information:

A company has inventory that cost $50,000. Its scrap value is $65,000. The inventory could be sold for $150,000 if manufactured further at an additional cost of $80,000.

Sell for scrap = 65,000 - 50,000 = 15,000

Continue processing = 150,000 - 80,000 - 50,000 = 20,000