Question

Oriole Company has old inventory on hand that cost $24750. Its scrap value is $33000. The inventory could be sold for $82500 if manufactured further at an additional cost of $24750. What should Oriole do

Answer 1

Answer:

Manufacture further and sell it for $82,500

Explanation:

Profit in such case will be:

Sales amount                  $33,000

Less: Cost of Inventory   $24,750

Profit                                 $8,250

Process further and sell.

Profit will be:

Sales value:                              $82,500

Less: Further processing cost $24,750

Less: Cost of Inventory           $24,750

Profit on Inventory                   $33,000