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The Lantern Corporation Relevant Costs

18. The Lantern Corporation has 1,000 obsolete lanterns that are carried in inventory at a manufacturing cost of $20,000. If the lanterns are re-machined for $5,000, they could be sold for $9,000. Alternatively, the lanterns could be sold for scrap for $1,000. Which alternative is more desirable and what are the total relevant costs for the alternative?

a Re-machine; $5,000
b Re-machine; $25,000
c Scrap; $20,000
d Scrap; $19,000

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18. The Lantern Corporation has 1,000 obsolete lanterns that are carried in inventory at a manufacturing cost of $20,000. If the lanterns are re-machined for $5,000, they could be sold for ...

Solution Summary

Strategy and coaching tips help you see the selection needed.

$2.19