A company has a process that results in 6,000 pounds of Product A that can be sold for $8 per...
A company has a process that results in 6,000 pounds of Product A that can be sold for $8 per pound. An alternative would be to process Product A further at a cost of $40,000 and then sell it for $14 per pound. Should management sell Product A now or should Product A be processed further and then sold? What is the effect of the action?
Sell now or process Further
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xxxx now, the xxxxxxx xxxx xx better xxx by xxxxxx
The xxxxx xxxxxxxx xxxx is to xxxxxxx further xx xxxx as the incremental xxxxxxx from such processing exceeds xxx incremental xxxxxxxxxx xxxxxx Incremental xxxxxxx = xxxx x $8) x 6,000 pounds x xxxxxxxx xxx xxxxxxxxxxx xxxx of $40,000 exceeds xxx xxxxxxxxxxx revenue of $36,000 by xxxxxx So, Company xxxxxx sell xxx xxxxxxx now.