Tigard, Inc. is reducing the sales price of it's smart television, which was originally $$375$ per unit. Units currently in work in process inventory have production costs of $$300$ per unit, and they can be sold for $$200$ per unit. Another option is to do additional work on these units for $$20$ per unit so they can be sold for $$250$ per unit.

The company is considering the option of throwing away the remaining smart television units that are in work$-$in$-$process inventory. What effect would this decision have on net income?

Possible Answers are:

Net income would be lower by $$375$ for each unit discarded.

Net income would be lower by $$230$ for each unit discarded.

This decision would have no effect on net income.

Net income would be lower by $$300$ for each unit discarded.