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27 August, 17:06

Concord Corporation is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $24 and Concord would sell it for $58. The cost to assemble the product is estimated at $22 per unit and the company believes the market would support a price of $75 on the assembled unit. What decision should Concord make?

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  1. 27 August, 19:46
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    Concord should not sell the assembled product.

    Explanation:

    Unassembled:

    Sell price: $58 - Cost $24 = Profit $34

    Assembled:

    Sell price: $75 - Cost $46 ($24 + $22) = Profit $29

    Selling the assembled unit decreases the profit of Concord Corporation.
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