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A chemical company spent $530,000 to produce 151,000 gallons of a chemical that can be sold for $5.20 per gallon. This chemical can be further
A chemical company spent $530,000 to produce 151,000 gallons of a chemical that can be sold for $5.20 per gallon. This chemical can be further processed into a weed killer that can be sold for $7.20 per gallon. It will cost $270,000 to process the chemical into the weed killer. Which of the following is true? O A. To maximize operating income, the company should continue to sell the chemical as is. O B. If the company decides to process further, it will increase operating income by $287,200. O c. If the company decides to process further, it will increase operating income by $32,000. OD. If the company decides to process further, it will decrease operating income by $1,087,200. Starforce Avionics makes aircraft instrumentation. Its basic navigation radio requires $50 in variable costs and $5,000 per month in fixed costs. Further processing the radio, to enhance its functionality, will require an additional $28 per unit of variable costs but no change to the fixed costs. The marketing manager believes that the company would be able to increase the sales price from $290 to $310. If Starforce decides to further process the product, operating income would: O A. increase by $78 per unit B. increase by $28 per unit OC. remain the same D. decrease by $8 per unit
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