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

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


$265 per unit

$150 per unit

$125 per unit

$10 per unit

Explanation / Answer

$265 = former price

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