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Zanatech's market for its remote control has changed significantly, and Zanatech has had to drop the...

Zanatech's market for its remote control has changed significantly, and Zanatech has had to drop the selling price per unit from $45 to $38. There are some units in the work in process inventory that have costs of $30 per unit associated with them. Zanatech can sell these units in their current state for $22 each. It will cost Zanatech $11 per unit to rework these units so that they can be sold for $38 each. Which of the following is not a relevant value in this problem?

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Answer #1

The cost associated with the work in process inventory that is $30 is irrelevant because it's sunk cost. This cost is already incurred and no matter what alternative we chose it won't change.

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