What is the net financial benefit from alternative three

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Question - Nancy Company has an idle machine that originally cost $200,000. The book value of the machine is $100,000. The company is considering three alternative uses of the idle machine:

Alternative 1: Disposal of machine. Disposal value of machine is $50,000.

Alternative 2: Use the idle machine to increase production of Product A. Contribution margin from additional sales of Product A is estimated to be $60,000.

Alternative 3: Use the idle machine to increase production of Product B. Contribution margin from additional sales of Product B is estimated to be $70,000.

Required - When considering the opportunity cost of the idle machine, what is the net financial benefit from Alternative 3?

A) $10,000

B) $20,000

C) $50,000

D) $70,000

Reference no: EM133182290

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