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Van Dorn Company has 3,000 faulty units of merchandise that already cost $62 each to manufacture. A salvage company will purchase the faulty units as
Van Dorn Company has 3,000 faulty units of merchandise that already cost $62 each to manufacture. A salvage company will purchase the faulty units as is for $22 each. The head of Van Dorn's production department estimates that the faulty units can be remedied for $43 per unit. If the units are remedied they can be sold at a market price of $98. The $62 per unit is a(n): A. Incremental cost. B. Out-of-pocket cost. C. Period cost. D. Sunk cost. E. Opportunity cost.
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