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

• Sunk cost.

• Period cost.

• Incremental cost.

• Out-of-pocket cost.

• Opportunity cost.