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

Manufacture further and sell it for $82,500

Step-by-step 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