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22 August, 18:02

Exercise 23-8 Sell or process further LO A1 Cobe Company has already manufactured 28,000 units of Product A at a cost of $28 per unit. The 28,000 units can be sold at this stage for $700,000. Alternatively, the units can be further processed at a $420,000 total additional cost and be converted into 5,600 units of Product B and 11,200 units of Product C. Per unit selling price for Product B is $105 and for Product C is $70. 1. Prepare an analysis that shows whether the 28,000 units of Product A should be processed further or not.

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  1. 22 August, 21:02
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    Answer: Analysis to show wether 28,000 units of product A should be processed or not

    Explanation:

    sell as is process further

    sales 700000 1372000

    relevant cost

    cost to process further 0 420000

    total relevant cost 0 420000

    income 700000 952000

    incremental income 252000
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