Question

Longview Baskets has in its inventory

2,500

damaged baskets that cost

$25,000

The baskets can be sold in their present condition for

$12,000​,

or repaired at a cost of

$13,000

and sold for

$40,000.

What is the opportunity cost of selling the baskets in their present​ condition?

A.

$27,000

B.

$37,000

C.

$53,000

D.

$ 25,000

Answer 1

Correct answer---(A) $27000

Selling price after repair	$   40,000.00
repair cost	$   13,000.00
Additional benefit or Opportunity cost of selling basket in present condition	$   27,000.00

Opportunity cost of selling basket as it is will be the benefit lost if repair is not done.