Waltherboro Company recently discontinued the manufacture of product J15.The standard costs for this product were:
A.Determine the current carrying value of the J15 inventory.
A.Ending inventory: 800 units * $119 = $95,200
B.1.Scrap: no financial benefit.
2.Sell to exporter: 800 units * $12 = $9,600
3.

The conversion of J15 into J16 will yield a $155 benefit,more than producing J16s directly.Note that the $119 cost of existing J15s is sunk.
B.Evaluate each alternative and determine the financial benefit to Waltherboro if the alternative is pursueD.

Question

Waltherboro Company recently discontinued the manufacture of product J15.The standard costs for this product were:
A.Determine the current carrying value of the J15 inventory.
A.Ending inventory: 800 units * $119 = $95,200
B.1.Scrap: no financial benefit.
2.Sell to exporter: 800 units * $12 = $9,600
3.
  
The conversion of J15 into J16 will yield a $155 benefit,more than producing J16s directly.Note that the $119 cost of existing J15s is sunk. 
B.Evaluate each alternative and determine the financial benefit to Waltherboro if the alternative is pursueD.

Quizplus · Accepted Answer

The Answer of Waltherboro Company recently discontinued the manufacture of product J15.The standard costs for this product were:
A.Determine the current carrying value of the J15 inventory.
A.Ending inventory: 800 units * $119 = $95,200
B.1.Scrap: no financial benefit.
2.Sell to exporter: 800 units * $12 = $9,600
3.
  
The conversion of J15 into J16 will yield a $155 benefit,more than producing J16s directly.Note that the $119 cost of existing J15s is sunk. 
B.Evaluate each alternative and determine the financial benefit to Waltherboro if the alternative is pursueD.

Waltherboro Company Recently Discontinued the Manufacture of Product J15