RNO Company's market for the Model 55 has changed significantly, and RNO has had to drop the price per unit from $265 to $125. There are some units in the work in process inventory that have costs of $150 per unit associated with them. RNO could sell these units in their current state for $100 each. It will cost RNO $10 per unit to complete these units so that they can be sold for $125 each.

Which of the following is the amount of sunk costs in this problem?
A) $150 per unit
B) $125 per unit
C) $10 per unit
D) $265 per unit

After YOU have answered these we will be happy to give you suggestions if needed. We do not do your work for you.

a)150

To identify the sunk costs in this problem, we need to understand the concept of sunk costs. Sunk costs are costs that have already been incurred and cannot be recovered regardless of the decision made.

In this scenario, the sunk costs would be the costs associated with the units in the work in process inventory that have costs of $150 per unit. The reason for this is that these costs have already been incurred and cannot be recovered, regardless of whether RNO sells the units in their current state for $100 each or completes them at an additional cost of $10 per unit.

Therefore, the correct answer is:

A) $150 per unit