Chang Industries has 1,300 defective units of product that already cost $48 each to produce. A salvage company will purchase the defective units as is for $22 each. Chang's production manager reports that the defects can be corrected for $40 per unit, enabling them to be sold at their regular market price of $38. The $48 per unit is a:

Multiple Choice

Sunk cost.

Period cost.

Incremental cost.

Opportunity cost.

Out-of-pocket cost.