Chang Industries has 2,300 defective units of product that a…
Chang Industries has 2,300 defective units of product that already cost $20 each to produce. A salvage company will purchase the defective units as is for $8 each. Chang’s production manager reports that the defects can be corrected for $12 per unit, enabling them to be sold at their regular market price of $24. The $20 per unit is a: