Chang Industries has 2,000 defective units of product that already cost $14 each to produce. A salvage company will purchase the defective units as is for $5 each. Chang's production manager reports that the defects can be corrected for $6 per unit, enabling them to be sold at their regular market price of $21. The $14 per unit is a: Multiple Choice Incremental cost. Sunk cost. Out-of-pocket cost. Opportunity cost. Period cost.

Question

12-05-2020
Business

contestada

Chang Industries has 2,000 defective units of product that already cost $14 each to produce. A salvage company will purchase the defective units as is for $5 each. Chang's production manager reports that the defects can be corrected for $6 per unit, enabling them to be sold at their regular market price of $21. The $14 per unit is a: Multiple Choice Incremental cost. Sunk cost. Out-of-pocket cost. Opportunity cost. Period cost.

Respuesta :

Otras preguntas

7.59. Five workers together can build a road in 20 days. Suppose every worker works at the same rate. If three workers work on the road for 10 days before eleve

With an order instrument, the payee must be identified with certainty, because the transfer of the instrument requires his or her signature. With an order instr

A pianist plans to play 4 pieces at a recital from her repertoire of 20 pieces, and is carefully considering which song to play first, second, etc. to create a

Writing Exercises 352. How do you decide which pattern to use?

17. A supermarket buys cartons of orange juice for k dollars each and then sells them for [tex]\frac{4k}{3}[/tex] dollars each. How many cartons do they need to

At a university faculty meeting, a proposal was made to increase the housing benefits for new faculty to keep pace with the high cost of housing. True or False:

28 students; 14 students what is the percentage of it?

East Pakistan wanted to declare independence from west Pakistan because all of the following reasons, except: A. religious differences. B. West Pakistan tried t

What makes Buwan the antagonist in Why the Sun Is Brighter Than the Moon?

Raider-X Company forecasts sales of 18,000 units for April. Beginning inventory is 3,000 units. The desired ending inventory is 30% higher than the beginning in

majocgonzalez majocgonzalez · Answer 1 · 2020-05-13T02:41:33+02:00

Answer:

Sunk cost

Explanation:

-Incremental cost is the total cost of producing an additional unit.

-Sunk cost is a cost that has already been paid and that it is not possible to get it back.

-Out-of-pocket cost is a cost that requires a direct payment in the actual period.

-Opportunity cost is the cost of not receiving a benefit when you choose an alernative over another one.

-Period cost is a cost that is not associated with the production of goods.

According to this, the answer is that the $14 per unit is a sunk cost because the company has already spent that manufacturing the products and it is not able to recover that money.