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Company buys locally-grown frumkins (a made-up vegetable) and produces frumkin products. The frumkin seed must be chopped into chunks. 1.50 It costs $15 to purchase
Company buys locally-grown frumkins (a made-up vegetable) and produces frumkin products. The frumkin seed must be chopped into chunks. 1.50 It costs $15 to purchase a frumkin and process it into a unit of frumkin chunks and a unit of frumkin seeds. o Company has allocated the cost according to weight of the units: $10 to the chunks and $5 to the see . A unit of chunks can be sold as is for $6. a unit of seeds sells for $20. y 54002. Historically, Company sells 1,000 units of chunks and 1,000 units of seeds to the distributor each month. The dist instead of frumkin chunks. Company can process a unit of chunks into a unit of puree for $2. The restaurant will pay $9 for a unit of pur After considering the costs as detailed above, Company is considering 2 alternatives, starting next month: Option A: Convert all of the chunks to puree. Sell seeds and puree. Option B: Only sell the seeds. The chunks will be composted (at no cost to Company) Compared to the current approach, which of the following is true? O
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