Exhibit 7-1 Talmont Products Has Dropped the Price Per Unit of Its

Multiple Choice

Exhibit 7-1
Talmont Products has dropped the price per unit of its smart phone product from $1,060 to $500.There are some units in work-in-process inventory that have costs of $600 per unit associated with them.Talmont could sell these units in their current state for $400.It will cost Talmont $40 to complete these units so that they can be sold for $500 each.
-Refer to Exhibit 7-1.When the incremental revenues and costs are analyzed,the company is better off by:

A) $500 per unit if they complete the units.
B) $40 per unit if they sell the units in their current state.
C) $200 per unit if they sell the units in their current state.
D) $60 per unit if they complete the units.
E) None of the answer choices is correct.