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Cobe Company has already manufactured 21,000 units of Product A at a cost of $25 per unit. The 21,000 units can be sold at this
Cobe Company has already manufactured 21,000 units of Product A at a cost of $25 per unit. The 21,000 units can be sold at this stage for $470,000. Alternatively, the units can be further processed at a $260,000 total additional cost and be converted into 5,200 units of Product B and 11,700 units of Product C. Per unit selling price for Product B is $102 and for Product C is $57. 1. Prepare an analysis that shows whether the 21,000 units of Product A should be processed further or not? Sell as is Process Further Sales $ 470,000 $ 1,197,300 Relevant costs: Costs to process further 0 260,000 Total relevant costs 260,000 Income (loss) 470,000 Incremental net income (or loss) if processed further Incremental income The company should process further
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