Lew's Metals Has a Machine Sitting Idle in Its Warehouse

question 19

Multiple Choice

Lew's Metals has a machine sitting idle in its warehouse.The machine originally cost $213,000,has a current book value of $32,300,has a scrap metal value of $13,000,and a market value of $46,900.The machine is totally paid for.What value should be placed on this machine if it is used for a new project?

• A) $0
• B) $13,000
• C) $32,300
• D) $46,900

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Definitions:

Factor Rating Method

A location method that instils objectivity into the process of identifying hard-to-evaluate costs.

Service Organizations

Companies that provide intangible products to consumers, such as healthcare, education, and financial services.

Production Costs

The costs related to making or acquiring goods and services that a business provides, including labor, materials, and overhead expenses.

Transportation Costs

Expenses incurred in moving goods from one location to another, including freight, fuel, and maintenance expenses.