Reference: 09-02 Tolar Company Has 400 Obsolete Desk Calculators That Are Carried

question 77

Multiple Choice

Reference: 09-02
Tolar Company has 400 obsolete desk calculators that are carried in inventory at a total cost of $26,800. If these calculators are upgraded at a total cost of $10,000, they can be sold for a total of $30,000. As an alternative, the calculators can be sold in their present condition for $11,200.
-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?

• A)$67.
• B)$8.
• C)$30.
• D)$53.

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Definitions:

Ending Inventory

The final value of goods available for sale at the end of an accounting period, calculated by adding purchases to beginning inventory and subtracting cost of goods sold.

Cost Of Raw Materials Used

The total expense incurred by a company for the raw materials that were consumed in the production process during a specific period.

Permanent/Temporary

Categories of accounts in accounting where permanent accounts are those that carry over balances into the next fiscal year, and temporary accounts are closed at the end of each fiscal year.

Financial Statement

A formal record of the financial activities and position of a business, individual, or other entity, typically including the balance sheet, income statement, and cash flow statement.