Tawstir Corporation Has 800 Obsolete Personal Computers That Are Carried

question 26

Multiple Choice

Tawstir Corporation has 800 obsolete personal computers that are carried in inventory at a total cost of $1, 100, 000.If these computers are upgraded at a total cost of $40, 000, they can be sold for a total of $750, 000.As an alternative, the computers can be sold in their present condition for $690, 000. Suppose the selling price of the upgraded computers has not been set.At what selling price per unit would the company be as well off upgrading the computers as if it just sold the computers in their present condition?

• A)$86.50
• B)$887.50
• C)$912.50
• D)$562.50

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Definitions:

Carrying Value

The book value of an asset or liability on a company's balance sheet, calculated as the original cost minus depreciation or amortization.

Intra-Entity Inventory Sales

Sales transactions of inventory between divisions or subsidiaries within the same parent company, not affecting consolidated financial results until sold externally.

Upstream

In the context of oil and gas, it refers to exploration and production activities; in supply chain management, it relates to the procurement of raw materials.

Downstream

In business, refers to processes or activities that occur toward the end of a supply chain, often associated with the distribution and sale of finished products.