Question
Zanatechs market for its remote control has changed significantly, and Zanatech has had to drop the selling price per unit from $45 to $38. There
Zanatechs market for its remote control has changed significantly, and Zanatech has had to drop the selling price per unit from $45 to $38. There are some units in the work in process inventory that have costs of $30 per unit associated with them. Zanatech can sell these units in their current state for $22 each. It will cost Zanatech $11 per unit to rework these units so that they can be sold for $38 each. A new employee looks at the analysis and exclaims, Well lose money with either of these alternatives! Lets just throw these units in the trash! Which alternative is preferable?
| Not enough information to make a decision. |
| To sell the units in their current state for $22 each. |
| To rework the units and sell them at $38 each. |
| To throw the units in the trash. |
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