Janssen Company has old inventory on hand that cost $24,000. Its scrap value is $32,000. The inventory could be sold for $80,000 if manufactured further at an additional cost of $24,000. What should Janssen do?
a) Sell the inventory for $32,000 scrap value
b) Dispose of the inventory to avoid any further decline in value
c) Manufacture further and sell it for $80,000
d) Hold the inventory at its $24,000 cost
Answer: c) Manufacture further and sell it for $80,000
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