The Tolar Corporation has 500 obsolete desk calculators that are carried in inventory at a total...
The Tolar Corporation has 500 obsolete desk calculators that are carried in inventory at a total cost of $720,000. If these calculators are upgraded at a total cost of $110,000, they can be sold for a total of $170,000. As an alternative, the calculators can be sold in their present condition for $50,000.
What is the financial advantage (disadvantage) to the company from upgrading the calculators?
Homework Answers
| The company has a financial advantage of $ 10,000 from upgrading the calculators | ||
| The same is illustrated below | ||
| Particulars | Amount ($) | Explanation |
| Carrying amount of calculators | 7,20,000 | It will not be considered in decision making as it is a sunk cost |
| If calculators are upgraded | ||
| Total cost of upgradation (A) | 1,10,000 | given in question |
| Total selling price (B) | 1,70,000 | given in question |
| Profit C= ( B-A ) | 60,000 | difference in the above |
| If calculators are not upgraded | ||
| Selling Price D | 50,000 | given in question |
| Total additional profit if calculators are upgraded (C-D) | 10,000 | |
| Please do upvote if you found the answer useful. | ||
| Feel free to reach in the comment section in case of any clarification or queries. |
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The Tolar Corporation has 500 obsolete desk calculators that are
carried in inventory at a total...
The Tolar Corporation has 500 obsolete desk calculators that are carried in inventory at a total...
The Tolar Corporation has 500 obsolete desk calculators that are carried in inventory at a total cost of $720,000. If these calculators are upgraded at a total cost of $110,000, they can be sold for a total of $170,000. As an alternative, the calculators can be sold in their present condition for $50,000. What is the financial advantage (disadvantage) to the company from upgrading the calculators? A) $120,000 B) ($60,000) C) $10,000 D) ($670,000)
The Tolar Corporation has 400 obsolete desk calculators that are carried in inventory at a total...
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The Tolar Corporation has 400 obsolete desk calculators that are carried in inventory at a total cost of $576,000. If these calculators are upgraded at a total cost of $170,000, they can be sold for a total of $230,000. As an alternative, the calculators can be sold in their present condition for $40,000. What is the financial advantage (disadvantage) to the company from upgrading the calculators?
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