Granger Company Makes Portable DVD Players

Granger Company makes portable DVD players. In its inventory, Granger found 200 DVD players that had become obsolete. Each DVD player has a cost of $100. Granger can upgrade these DVD players for $15 each after which they can be sold at a cost of $40 each. Granger has also received an offer to sell the DVD players, as is, for a total of $4,000. Compared to just selling the 200 DVD players for a total of $4,000 as they are, what is the net increase (decrease) in operating income if Granger upgrades the DVD players and then sells them?

A) $1,000 decrease
B) $1,000 increase
C) $5,000 decrease
D) $5,000 increase

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free