An employee of A/C Corporation has found some partially completed units of Model X in a dusty corner of the warehouse. A job ticket attached to the units indicates that a total of $850 in manufacturing costs have been used to bring the materials to this point in the manufacturing process. The units can be sold in their current condition for $275 to a scrap metal dealer. If A/C Corporation spends $285 to complete the units, they could be sold for $600.

What should A/C Corporation do? Why? Identify the sunk cost, if any.

Answer rating: 100% (QA)

Income if scrapped 275 Income if work is done and sold at higher price 600 2... View the full answer