a) Perform an incremental analysis (quantitative) of the three options. Keep your analysis on a unit basis.

b) Identify the nonfinancial concerns (qualitative) that should be taken into consideration.

c) Based on both of the above, state your case regarding the option that you believe should be pursued.

Silent Sentry manufactures gas leak detectors that are sold to homeowners throughout the United States at $25 apiece. Each detector is equipped with a sensory cell that is guaranteed to last two full years before needing to be replaced. The company currently has 50,000 gas leak detectors in its in- ventory that contain sensory cells that had been purchased from a discount vendor. Silent Sentry engineers estimate that these sensory cells will last only 18 months before needing to be replaced. The company has incurred the following unit costs related to the 50,000 detectors: Direct materials Direct labor Variable overhead Fixed overhead Total $10 2 3 1 $16 Silent Sentry is currently evaluating three options regarding the 50,000 detectors: 1. Scrap the inferior sensory cell in each unit and replace it with a new one at a cost of $8 each. The units could then be sold at their full unit price of $25. 2. Sell the units with the inferior sensory cells at a discounted unit price of $24. This option would also involve changing the packaging of each unit to inform the buyer that the estimated life of the sensory cell is 18 months. The estimated out-of-pocket cost associated with the packaging changes is $3 per unit. 3. Sell each unit "as is" with its current packaging to a discount buyer in a foreign country. The buyer has offered to pay Silent Sentry a unit price of $22