Question

A company has already incurred $5,600 of costs in producing 6,050 units of Product XY. Product XY can be sold as is for $27 per unit. Instead, the company could incur further processing costs of $11 per unit and sell the resulting product for $31 per unit. Should the company sell Product XY as is or process it further? (Any loss amount should be indicated with minus sign.)

Answer 1

Answer:

The company should sell product XY

Explanation:

The computation of given question is shown below:-

Particulars          Sell as is        Process Further       Incremental Amount

Selling Price

Per unit              $27                 $31                               -$4

Additional processing

Cost per unit                            $11                                 $11

Total               $27                    $20                               -$7

Therefore, as we can see that the negative amount came so we sell and if we proceed the company will go to the loss.