Question: Scrap or process further decision (Learning Objective 7)} Auto Components has an inventory of 500 obsolete remote entry keys that are carried in inventory at

Scrap or process further decision (Learning Objective 7)}

Auto Components has an inventory of 500 obsolete remote entry keys that are carried in inventory at a manufacturing cost of $\$ 80,000$. Production Supervisor Terri Smith must decide to do one of the following:

- Process the inventory further at a cost of $\$ 20,000$, with the expectation of selling it for $\$ 28,000$

- Scrap the inventory for a sale price of $\$ 6,000$

What should Smith do? Present figures to support your decision.

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