Incremental Costs. Electron Control, Inc., sells voltage regulators to other manufacturers, who then customize and distribute the products to quality assurance labs for their sensitive test equipment. The yearly volume of output is 15,000 units. The selling price and cost per unit are shown below:
Management is evaluating the alternative of performing the necessary customizing to allow Electron Control to sell its output directly to Q/A labs for $275 per unit. Although no added investment is required in productive facilities, additional processing costs are estimated as:
Definitions:
Creative Thinkers
Individuals who have the ability to look at problems or situations from a fresh perspective, leading to unorthodox solutions or innovations.
Fewer Mistakes
A term that refers to making less errors or inaccuracies in a process or activity.
Inspired
A state of being mentally stimulated to do or feel something, especially to do something creative.
Cognitive Tasks
Tasks that require mental processes such as perception, memory, problem solving, and decision-making.
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