CH 10 EX 10-8

Cobe Company has already manufactured 17,000 units of Product A at a cost of $25 per unit. The 17,000 units can be sold at this stage for $450,000. Alternatively, the units can be further processed at a $220,000 total additional cost and be converted into 5,300 units of Product B and 11,100 units of Product C. Per unit selling price for Product B is $100 and for Product C is $55. 1. Prepare an analysis that shows whether the 17,000 units of Product A should be processed further or not? Sell as is Process Further Sales Relevant costs: Total relevant costs Income (loss) Incremental net income (or loss) if processed further The company should