A factory must choose how to allocate a section of scarce floor space and is considering two different options.

Option A is a quality control station that will save the factory $$4,000$ in defective production costs per month.

Option B is an expanded assembly line that will let the factory produce an additional $100$ units per month. Both options require all of the available floor space, making it a scarce resource.

The factory's product sells for a wholesale cost of $$75$ per unit, and it faces $$40$ in materials costs per unit.

Which option should the factory choose, and what will be its annual effect on profits if both options will require the same labor and overhead costs of $$1\mathrm{.}000$ per month?

$$ Expanded assembly line and $$30,000$

$$ Quality control station and $$36,000$

$$ Quality control station and $$30,000$

$$ Expanded assembly line and $$42,000$

A company that currently produces final product A is considering stopping processing earlier in the production process and selling the intermediary product on the market. The final product sells for $$100$ per unit, whereas the firm believes it can sell the partially processed intermediary product for $$75$ per unit. The firm sells $1,000$ units per quarter and faces a total finish processing cost of $$10$ per unit plus $$17,000$ in plant overhead per quarter after split$-$off.

Should the firm sell the intermediary good or the final good?

$$ The final good, because final good sales increase profits by $$15,000$

$$ The intermediate good, because final good sales decrease profits by $$19,000$

$$ The final good, because final good sales increase profits by $$8,000$

$$ The intermediate good, because final good sales decrease profits by $$2,000$