Zanatech's Market for Its Remote Control Has Changed Significantly, and Zanatech

question 62

Multiple Choice

Zanatech's 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.How much is the financial impact if the units are processed furthur?

• A)$5 per unit profit
• B)$16 per unit profit
• C)$3 per unit loss
• D)$12 per unit loss

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Definitions:

Deregulation

The process of removing government regulations and restrictions from certain areas of business or sectors of the economy to encourage efficiency and competition.

Reagan Presidency

The period of American leadership under Ronald Reagan, the 40th President of the United States, from 1981 to 1989, noted for its conservative policies.

Great Society

A set of domestic programs in the United States, launched by President Lyndon B. Johnson, aimed at eliminating poverty and racial injustice.