Vicade has 1,000 commercial video game machines in inventory produced at a cost of $400 each (60% variable and 40% fixed). The machines were to have been sold for $1,000 each. However, the machines currently contain a minor malfunction reducing their selling price to $150 each. The company could correct the malfunction at a variable cost of $250 each and then sell the machines for $550 each.
For purposes of determining whether the machines should be reworked, what is the opportunity cost per unit?
A) $150
B) $200
C) $240
D) $400

Question

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The Answer of Vicade has 1,000 commercial video game machines in inventory produced at a cost of $400 each (60% variable and 40% fixed). The machines were to have been sold for $1,000 each. However, the machines currently contain a minor malfunction reducing their selling price to $150 each. The company could correct the malfunction at a variable cost of $250 each and then sell the machines for $550 each.
For purposes of determining whether the machines should be reworked, what is the opportunity cost per unit?
A) $150
B) $200
C) $240
D) $400

Vicade Has 1,000 Commercial Video Game Machines in Inventory Produced