h 23 Connect Assignment Help Save&ExileSubrilt; 10 Cobe Company has aready manuf

Question

h 23 Connect Assignment Help Save&ExileSubrilt; 10 Cobe Company has aready manufactured 20,000 units of Product A at a cost of $10 per unit The 20,000 units can be sold at tris stage for $490,000. Alternatively, the units can be further processed at a $230,000 total additional cost and be converted into 5,400 units of Product B and 11,400 units of Product C. Per unit selling price for Product B is $110 and for Product C is $53. 1. Prepare an analysis that shows whether the 20,000 units of Product A should be processed further or not 0 s lock

Explanation / Answer

Sell as it is Process further Sales $       4,90,000 $       11,98,200 Relevant costs Cost to process further $          2,30,000 Total relevant costs $          2,30,000 Income (loss) $       4,90,000 $          9,68,200 Incremental net income or (loss) if processed further $          4,78,200 incremental income The company should Process further Workings: Process further Sales units produced Selling price Total sales Product B                 5,400 $ 110 $ 5,94,000 Product C               11,400 $ 53 $ 6,04,200 $ 11,98,200 Incremental net income or (loss) if processed further = $9,68,200 - $4,90,000 = $ 4,78,200

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