Explore BrainMass

Explore BrainMass

    Central Medical Supply: refit obsolete testing equipment or sell it. Analyze options, Tripac

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Please provide your reasoning.
    Thank you.

    Central Medical Supply, Inc., a manufacturer of medical testing equipment, has $240,000 worth of an obsolete line of testing equipment. The obsolete equipment can be adapted to fit another line of testing equipment at a cost of $64,000; the market value would then be $136,000. However, Tripac offered to purchase the obsolete equipment as is for $88,000.

    15. Which alternative should Central select?
    a. scrap the inventory at no additional cost
    b. rework the inventory at an additional loss of $304,000
    c. rework the inventory and improve profits by$69,000
    d. sell the inventory to Tripac

    © BrainMass Inc. brainmass.com June 3, 2020, 9:27 pm ad1c9bdddf

    Solution Preview

    Unless there is other information regarding splitting the costs for the other line of business I would choose d. sell the inventory to ...

    Solution Summary

    The solution selects a response and includes explanations to support the response.