Question
Alma Company is starting a business and is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product
Alma Company is starting a business and is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is P40 and Alma Company would sell it for P90. The cost to assemble the product is estimated at P18 per unit and Alma Company believes the market would support a price of P116 on the assembled unit.
What is the correct decision and its advantage using the sell or process further decision rule?
a. Sell unassembled, Advantage by P18 per unit
b. Process further, Advantage by P26 per unit
c. Process further, Advantage by P8 per unit
d. Sell unassembled, Advantage by P26 per unit
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