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| A company has 7,000 obsolete toys which are carried in inventory at a manufacturing cost of $6 per unit. If the toys are reworked for $2 per unit, they could be sold for $3 per unit. If the toys are scrapped, they could be sold for $1.85 per unit. Which alternative is more desirable (rework or scrap) and what is the total dollar amount of the advantage of that alternative? A. Rework, $8,050. B. Scrap, $47,950. C. Scrap, $5,950. D. Rework, $36,050. |