The Hudson Corporation has 7,800 obsolete units of a product that are carried in inventory...
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Accounting
The Hudson Corporation has 7,800 obsolete units of a product that are carried in inventory at a manufacturing cost of $156,000. If the units are remachined for $38,200, they could be sold for $70,000. Alternatively, the units could be sold for scrap for $29,200. The alternative that is more desirable and the total relevant costs for that alternative are:
scrap; $156,000.
scrap; $126,800.
remachine; $38,200.
remachine; $194,200.
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