Question
Cantrell Company has already manufactured 20,000 units of Product A at a cost of $20 per unit. The 20,000 units can be sold at this
Cantrell Company has already manufactured 20,000 units of Product A at a cost of $20 per unit. The 20,000 units can be sold at this stage for $570,000. Alternatively, the units can be further processed at a $440,000 total additional cost and be converted into 4,800 units of Product B and 7,300 units of Product C. Per unit selling price for Product B is $73 and for Product C is $59. |
1. | Calculate the Incremental Net Profit (or loss) if processed further. (Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.) |
Incremental net profit (or loss) | $ |
2. | Indicate whether the 20,000 units of Product A should be processed further or not. | ||||
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