Thaler Company bought $26,000 of raw materials a year ago in anticipation of producing 5,000 units of
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Question:
Thaler Company bought $26,000 of raw materials a year ago in anticipation of producing 5,000 units of a deluxe version of its product to be priced at $75 each. Now the price of the deluxe version has dropped to $35 each, and Thaler is now deciding whether to produce 1,500 units of the deluxe version at a cost of $48,000 or to scrap the project. What is the opportunity cost of this decision?
a.$26,000
b.$48,000
c.$175,000
d.$375,000
Related Book For
Cornerstones of Cost Management
ISBN: 978-1305970663
4th edition
Authors: Don R. Hansen, Maryanne M. Mowen
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