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

Question

NTN Company's market for the Model 55 has changed significantly, and NTN 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. NTN could sell these units in their current state for $100 each. It will cost NTN $10 per unit to complete these units so that they can be sold for $125 each.

4.

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

A)

$15 per unit if they complete the units.

B)

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

C)

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

D)

$125 per unit if they complete the units.

Explanation / Answer

4. When the incremental revenues and expenses are analysed, the Company is better off by $ 15 per unit if they complete the units.

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