The Lantern Corporation Has 1,000 Obsolete Lanterns That Are Carried

question 43

Multiple Choice

The Lantern Corporation has 1,000 obsolete lanterns that are carried in inventory at a manufacturing cost of $20,000.If the lanterns are re-machined for $5,000,they could be sold for $9,000.Alternatively,the lanterns could be sold for scrap for $1,000.Which alternative is more desirable,and what are the total relevant costs for that alternative?

• A) Re-machine and $5,000.
• B) Re-machine and $25,000.
• C) Scrap and $20,000.
• D) Scrap and $19,000.

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Definitions:

Cooperative Strategy

A method where businesses or organizations work together towards mutual goals, often leading to synergies and competitive advantages.

Joint Ventures

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task or project.

Strategic Alliance

A long-term partnership between two or more organizations to pursue a set of agreed upon objectives while remaining independent organizations.

Organizational Cultures

The shared values, beliefs, and practices that influence how people behave in organizations.