Ask Question
9 September, 09:55

Sheffield Corp. is starting business and is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $60 and Sheffield Corp. would sell it for $135. The cost to assemble the product is estimated at $25 per unit and Sheffield Corp. believes the market would support a price of $170 on the assembled unit. What is the correct decision using the sell or process further decision rule?

+2
Answers (1)
  1. 9 September, 10:47
    0
    The correct decision would be to process further before product is sold

    Explanation:

    Profit if the product is sold un-assembled

    Selling price $135

    cost of un-assembled product ($60)

    Profit on un-assembled product $75

    Profit if the product is further assembled before sale

    Selling price $170

    Cost of un-assembled product ($60)

    Cost of assembling product ($25)

    Profit if the product is assembled $85

    The profit increased by $10 if the product is further assembled before it is sold.

    Hence the best course of action would be to further assemble the product before it is sold
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Sheffield Corp. is starting business and is unsure of whether to sell its product assembled or unassembled. The unit cost of the ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers