he Tolar Corporation has 400 obsolete desk calculators that are carried in inventory at a total...

he 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 $150,000, they can be sold for a total of $210,000. As an alternative, the calculators can be sold in their present condition for $40,000.

Assume that Tolar decides to upgrade the calculators. At what selling price per unit would the company be as well off as if it just sold the calculators in their present condition?

Solutions

Expert Solution

Thank you for your patience. Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks!

Tolar

Sunk cost are those costs which are already incurred.

In the present case sunk cost is the cost of obsolete inventory i.e. $ 576,000.

If Tolar will sale now then it will get $ 40,000.

So if the company wants to well off as if it just sold the calculators in their present condition or upgrade it should sell in upgrade costs+ sale value in present condition.

So sale value should be $ 150,000 (upgrade costs) + $ 40,000 (sale value of present condition)= $ 190,000.

Sale value	190,000.00
Units	400.00
Sell price	475.00
So sell price should be $ 475 per unit.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

AZ Company has 400 obsolete widgets that are carried in inventory at a total cost of...

AZ Company has 400 obsolete widgets that are carried in inventory at a total cost of $576,000. If these widgets are upgraded at a total cost of $100,000, they can be sold for a total of $160,000. As an alternative, the widgets can be sold in their present condition for $40,000. Suppose the selling price of the upgraded widgets has not been set. At what selling price per unit would the company be as well off upgrading the widgets as...

1. The Industries has 50 obsolete desktop computers that are carried in inventory at a total...

1. The Industries has 50 obsolete desktop computers that are carried in inventory at a total cost of $27,800. If these computers are upgraded at a total cost of $12,000, they can be sold for a total of $32,000. As an alternative, the computers can be sold in their present condition for $12,200. The sunk cost in this situation is: 2. In order to maintain consistency, a cost that is relevant in one decision should be regarded as relevant in...

Unknown has a molecular weight of 400. An experiment requires an incubation to be carried out...

Unknown has a molecular weight of 400. An experiment requires an incubation to be carried out with 1 μM of unknown. The incubation will be carried out in a total volume of 500 μL of culture medium. What volume of each of the stock solutions below (a – d) would you need to add to the incubation to give 1 μM of unknown? a. 1 mM b. 0.5% (w/v) c. 20 μg/dL d. 10 μg/mL e. Due to the toxicity...

Mr Ojomu is a 42 year male of African origin. He has a demanding desk-based job...

Mr Ojomu is a 42 year male of African origin. He has a demanding desk-based job and frequently has to work long hours. He rarely eats regular meals and so has developed a habit of snacking on foods with high salt, fat and sugar contents. He routinely drinks at least 4 cups of coffee a day and at least one bottle of coca cola. Recently he has noticed that he has put on weight and easily gets out of breath...

Mr. Mark is a 42 year male of African origin. He has a demanding desk-based job...

Mr. Mark is a 42 year male of African origin. He has a demanding desk-based job and frequently has to work long hours. He rarely eats regular meals and so has developed a habit of snacking on foods with high salt, fat and sugar contents. He routinely drinks at least 4 cups of coffee a day and at least one bottle of coca cola. Recently he has noticed that he has put on weight and easily gets out of breath...

a diffraction grating has 400 slits in total. would you be able to resolve the sodium...

a diffraction grating has 400 slits in total. would you be able to resolve the sodium doublet in the 3rd order with this grating? explain the wavelengths of the sodium doublet are 589nm and 589.6nm Question 2 In a diffraction pattern due to double slits, the third order interference maxima falls on the first order diffraction minima. What is the relationship between slot srparation and slit width. Two slits are identical

In a perfectly competitive industry, each firm has a total cost function of TC = 400...

In a perfectly competitive industry, each firm has a total cost function of TC = 400 + 10q + q2 and a marginal cost curve of MC = 10 + 2q if it produces a positive quantity of output q. If a firm produces zero output it has no costs. The market price is $50. Which statement is true?] a. Each firm produces 20 units of output; the industry will require entry to reach its long-run equilibrium. b. Each firm...

AMC Corporation currently has an enterprise value of $ 400 million and $ 125 million in...

AMC Corporation currently has an enterprise value of $ 400 million and $ 125 million in excess cash. The firm has 10 million shares outstanding and no debt. Suppose AMC uses its excess cash to repurchase shares. After the share repurchase, news will come out that will change AMC's enterprise value to either $ 600 million or $ 200million. a. What is AMC's share price prior to the share repurchase? b. What is AMC's share price after the repurchase if...

The Xu Corporation uses a periodic inventory system. The company has a beginning inventory of 2,050...

The Xu Corporation uses a periodic inventory system. The company has a beginning inventory of 2,050 units at $23 each on January 1. Xu purchases 2,300 units at $22 each in February and 1,100 units at $24 each in March. There were no additional purchases or sales during the remainder of the year. Xu sells 2,100 units during the quarter. If Xu uses the LIFO method, what is its cost of goods sold?

Fiedler Corporation uses Lower of Cost or Market to value inventory. An item in inventory has...

Fiedler Corporation uses Lower of Cost or Market to value inventory. An item in inventory has the following information. How much will this item be valued at on the books for reporting purposes? Sales Price 1,200 Net Realizable Value 1,150 Normal Profit 80 Replacement Cost 1,050 Original Cost 1,100

Subjects