B. Scrapping, because profit will increase by $450,000 more than reW eworking, b
ID: 2600110 • Letter: B
Question
B. Scrapping, because profit will increase by $450,000 more than reW eworking, because profit will increase by $50,000 more than scrapping. pping, because profit will increase by $50,000 more than reworking. Reworking because profit will increase by S450,000 more than scrapping 60 o, so 6. A company has already incurred a $12,000 cost in partially producing its two products partially and fully processed are shown in the table below with the Their selling prices when additional costs necessary to finish their processing. Based on this information, should any products be processed further? Product Unfinished Finished Further Selling Price Selling Price Processing Costs $775 $700 $800 S65 $89 $888 A. Both product A and product B should be processed further. B. Neither product A nor product B should be processed further. C. Only product B should be processed further. D) Only product A should be processed further. A processing further decision cannot be made from the available data.Explanation / Answer
Answer:
D: Only product A should be processed further
Explanation to the answer:
we have to check profit after further processing
Product A:
($775 - $700) - $65
= $10
Product B
: ($888 - $800) - $89
= ($1)
As we can see from the above calculation that only product A has positive profit after further processing so Only product A should be processed further
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