When Charlie went to the lumber yard yesterday, he noticed a big stack of oak that had a "Sale--30% off Regular Price" sign on it. He talked with the salesman about it and learned that the yard had bought a large amount of oak at a reduced price because it had been damaged in shipment. Charlie looked at several pieces and decided against buying any, but now he's wondering if he should go back and see if there is any of the sale merchandise still available. He figures that the increase in the amount of scrap due to the damage in shipment would necessitate a 25% increase in the total amount of material he would use. What should Charlie do?  Answer

Copyright © 2004 Gerald M. Myers. All rights reserved. This site has been developed as aid to instructors and students in managerial accounting. The scenarios contained herein are not intended to reflect effective or ineffective handling of managerial situations. Any resemblance to existing organizations is purely coincidental.

Last modified: August 03, 2005