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Cobe Company has already manufactured 23,000 units of Product A at a cost of $25 per unit. The 23,000 units can be sold at this
Cobe Company has already manufactured 23,000 units of Product A at a cost of $25 per unit. The 23,000 units can be sold at this stage for $440,000. Alternatively, the units can be further processed at a $240,000 total additional cost and be converted into 5,900 units of Product B and 11,400 units of Product C. Per unit selling price for Product B is $108 and for Product C is $53. 1. Prepare an analysis that shows whether the 23,000 units of Product A should be processed further or not? Sell as is Process Further $ 1,241,400 Sales 440,000 Relevant costs: Costs to process further 0 240,000 240,000 Total relevant costs Income (loss) Incremental net income (or loss) if processed further Incremental income The company should process further
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