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Obsolete Inventory: Armstrong Corporation

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Obsolete Inventory

Armstrong Corporation manufactured bicycles parts. The company currently has a $21,000 inventory of parts that have become obsolete due to changes in design specifications. The parts could be sold for $9,000, or modified for $12,000 and sold for $22,300.

1. Which of the data above are relevant to the decision about the obsolete parts?
2. Prepare an analysis of the decision.

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Solution Summary

Brief instructional comments are examined. The expert examines obsolete inventory for Armstrong Corporation.

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1. What is relevant is what would change between alternatives. The original cost ($21,000) will not change no matter what ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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