The Steel Can Company has 100,000 obsolete cans in inventory at a cost of $5,000. The cans can be cut in half to make candle holders for $1,000. The candle holders can be sold for $1,750 in total. If the cans are scrapped, they could be sold for $450.
Which alternative should the Steel Can Company accept and what is the relevant profit from the alternative?

Question

The Steel Can Company has 100,000 obsolete cans in inventory at a cost of $5,000. The cans can be cut in half to make candle holders for $1,000. The candle holders can be sold for $1,750 in total. If the cans are scrapped, they could be sold for $450. 
Which alternative should the Steel Can Company accept and what is the relevant profit from the alternative?

Quizplus · Accepted Answer

The Answer of The Steel Can Company has 100,000 obsolete cans in inventory at a cost of $5,000. The cans can be cut in half to make candle holders for $1,000. The candle holders can be sold for $1,750 in total. If the cans are scrapped, they could be sold for $450. 
Which alternative should the Steel Can Company accept and what is the relevant profit from the alternative?

The Steel Can Company Has 100,000 Obsolete Cans in Inventory