(Solution) 19. Allegiance, Inc. Has $125,000 Of Inventory That Suffered Minor Smoke Damage From A Fire In The Warehouse. The Company Can Sell The Goods | Snapessays.com


(Solution) 19. Allegiance, Inc. has $125,000 of inventory that suffered minor smoke damage from a fire in the warehouse. The company can sell the goods


Please find these multiple choice , they have the correct answer but I need you to show me how they found the answers ; I need rules and show me step by step .19. Allegiance, Inc. has $125,000 of inventory that suffered minor smoke damage from a

 

fire in the warehouse. The company can sell the goods "as is" for $45,000; alternatively,

 

the goods can be cleaned and shipped to the firm's outlet center at a cost of $23,000.

 

There the goods could be sold for $80,000. What alternative is more desirable and what is

 

the relevant cost for that alternative?

 

A.

 

Sell "as is," $125,000.

 

B.

 

Clean and ship to outlet center, $23,000.

 

C.

 

Clean and ship to outlet center, $103,000.

 

D.

 

Clean and ship to outlet center, $148,000.

 

E.

 

Neither alternative is desirable, as both produce a loss for the firm.

 

20. In early July, Mike Gottfried purchased a $70 ticket to the December 15 game of the

 

Chicago Titans. (The Titans belong to the Midwest Football League and play their games

 

outdoors on the shore of Lake Michigan.) Parking for the game was expected to cost

 

approximately $22, and Gottfried would probably spend another $15 for a souvenir

 

program and food. It is now December 14. The Titans were having a miserable season

 

and the temperature was expected to peak at 5 degrees on game day. Mike therefore

 

decided to skip the game and took his wife to the movies, with tickets and dinner costing

 

$50. The sunk cost associated with this decision situation is:

 

A.

 

$20.

 

B.

 

$50.

 

C.

 

$70.

 

D.

 

$107.

 

E.

 

some other amount.

 

21. In early July, Jim Lopez purchased a $70 ticket to the December 15 game of the

 

Chicago Titans. (The Titans belong to the Midwest Football League and play their games

 

outdoors on the shore of Lake Michigan.) Parking for the game was expected to cost

 

approximately $22, and Lopez would probably spend another $15 for a souvenir program

 

and food. It is now December 14. The Titans were having a miserable season and the

 

temperature was expected to peak at 5 degrees on game day. Jim is thinking about

 

skipping the game and taking his wife to the movies and dinner, at a cost of $50. The

 

amount of sunk cost that should influence Jim's decision to spend some time with his

 

wife is:

 

A.

 

$0.

 

B.

 

$20.

 

C.

 

$50.

 

D.

 

$70.

 

E.

 

some other amount.

 

25. Susan is contemplating a job offer with an advertising agency where she will make

 

$54,000 in her first year of employment. Alternatively, Susan can begin to work in her

 

father's business where she will earn an annual salary of $38,000. If Susan decides to

 

work with her father, the opportunity cost would be:

 

A.

 

$0.

 

B.

 

$38,000.

 

C.

 

$54,000.

 


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