Question

The Tolar Corporation has 500 obsolete desk calculators that are carried in inventory at a total cost of $720,000. If these calculators are upgraded at a total cost of $210,000, they can be sold for a total of $270,000. As an alternative, the calculators can be sold in their present condition for $50,000. Assume that Tolar decides to upgrade the calculators. At what selling price per unit would the company be as well off as if it just sold the calculators in their present condition?

Answer 1

Answer:

Price= $520 per  unit

Explanation:

Giving the following information:

The Tolar Corporation has 500 obsolete desk calculators.

If these calculators are upgraded at a total cost of $210,000, they can be sold for a total of $270,000.

As an alternative, the calculators can be sold in their present condition for $50,000.

Upgrade cost= 210,000

Profit= 50,000

Total revenue= 260,000

Price= 260,000/500= $520 per  unit