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

question 29

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.Which of the following is the amount of sunk costs in this problem?

• A)$30 per unit
• B)$11 per unit
• C)$38 per unit
• D)$15 per unit

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Definitions:

Temporary Workers

Individuals employed on a short-term basis, often to meet seasonal demands, cover for absent employees, or complete particular projects.

Debt Relief

The partial or total remission of debts, especially those owed by developing countries, by creditors, often to promote economic stability and development.

Foreign Aid

Financial or other assistance provided by one country to another, often in the form of grants, loans, or technical assistance, to promote development and welfare.

Capital-Using

Refers to production processes or technologies that require a high input of capital, such as machinery and equipment, rather than labor.