COST ACCOUNTING
INFORMATION FOR DECISION MAKING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Edison Company has 5, 000 obsolete desk lamps that are carried in inventory at a manufacturing cost of $45000. If the lamps are reworked for $20, 000, they could be sold for $37, 000. Alternatively, the lamps could be sold for $9, 000 for scrap. In a decision model analyzing these alternatives, the sunk cost would be:
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$9, 000
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$8, 000
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$43, 000
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$45, 000
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Explanation:
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