Chang Industries has 1,500 defective units of product that already cost $44 each to produce. A salvage company will purchase the defective units as is for $20 each. Chang's production manager reports that the defects can be corrected for $36 per unit, enabling them to be sold at their regular market price of $36. The $44 per unit is a: Multiple Choice Period cost. Sunk cost. Opportunity cost. Out-of-pocket cost. Incremental cost.

Chang Industries has 1,500 defective units of product that already cost $44 each to produce. A salvage company will purchase the defective units as is for $20 each. Chang's production manager reports that the defects can be corrected for $36 per unit, enabling them to be sold at their regular market price of $36. The $44 per unit is a: Multiple Choice Period cost. Sunk cost. Opportunity cost. Out-of-pocket cost. Incremental cost.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 19E: Walloon Company produced 150 defective units last month at a unit manufacturing cost of 30. The...

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