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A company incurred costs of $8,000 in producing 1,000 gallons of Apex. Apex can be sold for $24 per gallon now or processed further at
A company incurred costs of $8,000 in producing 1,000 gallons of Apex. Apex can be sold for $24 per gallon now or processed further at a cost of $14,000 and then sold for $40 per gallon. Which one of the following actions would be most advantageous to the company and what is the economic effect?
a. | Sell Apex now; the company would be $2,000 better off | |
b. | Process Apex further; the company would be $16,000 better off | |
c. | Sell Apex now; the company would be $10,000 better off. | |
d. | Process Apex further; the company would be $2,000 better off. |
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