Exercise 3.22 Thaler Company brought $26,000 of raw materials a year ago in anticipation of producing 5,000 units of a deluxe version of its product to be priced at $75 each. Now the price of the deluxe version has dropped to $35 each, and Thaler is now deciding whether to produce 1,500 units of the deluxe version at a cost $48,000 or to scrap the project. What is the opportunity cost of this decision? a. $175,000 b. $375,000 c. $48,000 d. $26,000
Exercise 3.22 Thaler Company brought $26,000 of raw materials a year ago in anticipation of producing 5,000 units of a deluxe version of its product to be priced at $75 each. Now the price of the deluxe version has dropped to $35 each, and Thaler is now deciding whether to produce 1,500 units of the deluxe version at a cost $48,000 or to scrap the project. What is the opportunity cost of this decision? a. $175,000 b. $375,000 c. $48,000 d. $26,000
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 22E: Thaler Company bought 26,000 of raw materials a year ago in anticipation of producing 5,000 units of...
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Exercise 3.22
Thaler Company brought $26,000 of raw materials a year ago in anticipation of producing 5,000 units of
a deluxe version of its product to be priced at $75 each. Now the price of the deluxe version has dropped
to $35 each, and Thaler is now deciding whether to produce 1,500 units of the deluxe version at a cost
$48,000 or to scrap the project. What is the opportunity cost of this decision?
a. $175,000
b. $375,000
c. $48,000
d. $26,000
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