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16 August, 04:46

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

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  1. 16 August, 06:36
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    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
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