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Cobe Company has already manufactured 18,000 units of Product A at a cost of $15 per unit. The 18,000 units can be sold at this
Cobe Company has already manufactured 18,000 units of Product A at a cost of $15 per unit. The 18,000 units can be sold at this stage for $460,000. Alternatively, the units can be further processed at a $240,000 total additional cost and be converted into 6,000 units of Product B and 11,500 units of Product C. Per unit selling price for Product B is $109 and for Product C is $52. 1. Prepare an analysis that shows whether the 18,000 units of Product A should be processed further or not? Sell as is $ 460,000 Process Further $ 1,252,000 Sales Relevant costs: Costs to process further 240,000 240,000 Total relevant costs Income (loss) $ 460,000 Incremental net income (or loss) if processed further
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