Question 1 Bramble Corp. is starting business and is unsure of whether to sell i

Question

Question 1 Bramble 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 Bramble Corp. would sell it for $135. The cost to assemble the product is estimated at $23 per unit and Bramble Corp. believes the market would support a price of $173 on the assembled unit. What is the correct decision using the sell or process further decision rule? Sell before assembly, the company will be better off by s38 per unit. O Sell before assembly, the company will be better off by $23 per unit. O Process further, the company will be better off by $38 per unit. O Process further, the company will be better off by $15 per unit. Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Process further as it will generate $15 per unit more than unprocess.

Cost for Processing Units = 60+ 23 = 83

Particulars Unprocess Process Change Sales                135.00            173.00              38.00 Less: Cost                   60.00               83.00              23.00 Profit                   75.00               90.00              15.00

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