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The Manassas Company has 55 obsolete keyboards that are carried in inventory at a cost of $9,600. If these keyboards are upgraded at a cost of $7,800, they could be sold for $18,000. Alternatively, the keyboards could be sold “as is” for $9,000. What is the net advantage or disadvantage of re-working the keyboards?
Expert Answer
Incremental advantage of rework=($18000-$7800)=$10200.
Hence net advantage if re-working the keyboards=($10200-$9000)
=$1200.
