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The Tolar Corporation has 400 obsolete desk calculators that are carried in inventory at a total cost of $576,000. If these calculators are upgraded at a total cost of $170,000, they can be sold for a total of $230,000. As an alternative, the calculators can be sold in their present condition for $40,000. What is the financial advantage (disadvantage) to the company from upgrading the calculators?

Respuesta :

Answer:

$20,000

Explanation:

Given :

Total cost of inventory=  $576,000

Upgraded cost of calculator  =$170,000

Sold cost  of calculator =$230,000

Present sales cost = $40,000.

The incremental revenue of the calculator of sales can be determined by

[tex]= Sold\ cost\ of\ calculator\ -\ Upgraded\ cost\ of\ calculator\[/tex]

=$230,000 -  $170,000

=$60,000

Therefore financial advantage  to the company from upgrading to the calculators can be determined

[tex]$\ 60,000- $40,000\\[/tex]

=$20,000

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