Vickery Machining Company is nearly finished constructing a specially designed piece of machining equipment when the customer declares bankruptcy and cannot pay for the equipment. Vickery estimates that the cost associated with making the uncompleted equipment was $$1,800,000.$ Because the machining equipment was specially designed for the customer, there are no other buyers for the equipment unless it is rebuilt. The cost to rebuild is $$600,000,$ after which the product can be sold for $$750,000,$ or the equipment can be scrapped for $$100,000.$

a$.$ Identify each of the costs in this scenario as sunk, out$-$of$-$pocket, or incremental.

b$.$ What should Vickery do$?$

Complete this question by entering your answers in the tabs below.

Required A

Identify each of the costs in this scenario as sunk, out$-$of$-$pocket, or incremental.

$\backslash$table$[[$Costs incurred to$-$date,$],[$Costs to rebuild,$],[$Potential sales price,$]]$