RNO Company\'s market for the Model 55 has changed significantly, and RNO has ha

Question

RNO Company's market for the Model 55 has changed significantly, and RNO has had to drop the price per unit from $265 to $125. There are some units in the work in process inventory that have costs of $150 per unit associated with them. RNO could sell these units in their current state for $100 each. It will cost RNO $10 per unit to complete these units so that they can be sold for $125 each.
Reference: Ref 7-1

When the incremental revenues and expenses are analyzed, the company is better off by
Answer


$125 per unit if they complete the units.

$15 per unit if they complete the units.

$10 per unit if the sell the units in their current state.

$25 per unit if they sell the units in their current state.

Explanation / Answer

$150 per unit as these costs are already expended.

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