Graham Company Has 15,000 Units in Inventory That Had a Production

question 79

Multiple Choice

Graham Company has 15,000 units in inventory that had a production cost of $3 per unit.These units cannot be sold through normal channels due to a significant technology change.These units could be reworked at a total cost of $23,000 and sold for $28,000.Another alternative is to sell the units to a junk dealer for $8,500.The relevant cost for Graham to consider in making its decision is

• A)$45,000 of original product costs.
• B)$23,000 for reworking the units.
• C)$68,000 for reworking the units.
• D)$28,000 for selling the units to the junk dealer.

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Definitions:

Domestic

Pertaining to or occurring within a particular country; not foreign or international.

Promoters

Individuals or companies that organize and finance the formation of a corporation or event.

Subscription Agreements

Contracts between a company and investors, detailing the purchase of shares of the company by the investors.

Infant Corporation

A term used to describe a corporation in its early stage of existence, typically considered less capable of meeting legal or financial commitments.