The Lantern Corporation Has 1,000 Obsolete Lanterns That Are Carried

Multiple Choice

The Lantern Corporation has 1,000 obsolete lanterns that are carried in inventory at ? manufacturing cost of $20,000. If the lanterns are remachined for $5,000, they could be sold for $9,000. Alternatively, the lanterns could be sold for scrap for $1,000. Which alternative is more desirable and what are the total relevant costs for that alternative?

A) Scrap and $1, 000.
B) Remachine and $25,000.
C) Scrap and $21, 000.
D) Remachine and $5,000.