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Cobe Company has already manufactured 20,000 units of Product A at a cost of $30 per unit. The 20,000 units can be sold at this
Cobe Company has already manufactured 20,000 units of Product A at a cost of $30 per unit. The 20,000 units can be sold at this stage for $410,000. Alternatively, the units can be further processed at a $300,000 total additional cost and be converted into 5,800 units of Product B and 11,300 units of Product C. Per unit selling price for Product B is $108 and for Product C is $54 1. Prepare an analysis that shows whether the 20,000 units of Product A should be processed further or not. Process Sell as is Further $410,000 $ 1,236,600 Sales Relevant costs: Costs to process further Manufacturing costs incurred to date Total relevant costs Income (loss) Incremental net income (or loss) if processed further The company should process further
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