Required information [The following information applies to the questions display

Question

Required information [The following information applies to the questions displayed below.] Armstrong Corporation manufactures bicycle parts. The company currently has a $18,500 inventory of parts that have become obsolete due to changes in design specifications. The parts could be sold for $6,300, or modified for $9,100 and sold for $19,700. Required: 1 Identify the relevance of the data given in the exercise to the decision about what to do with the obsolete parts Current sales value for unmodified parts Sales value for modified parts Modification costs Current book value of inventory

Explanation / Answer

Current Sales value for unmodified parts = $6,300

Sales value for modified parts = $19,700

Modification costs = $9,100

Current book value of inventory = $18,500

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