Question
Holmes Company produces a product that can be either sold as is or processed further. Holmes has already spent $88,000 to produce 1,875 units that
Holmes Company produces a product that can be either sold as is or processed further. Holmes has already spent $88,000 to produce 1,875 units that can be sold now for $89,500 to another manufacturer. Alternatively, Holmes can process the units further at an incremental cost of $255 per unit. If Holmes processes further, the units can be sold for $380 each. Should Holmes sell the product now or process it further?
Here is a chart but it won't copy correctly
Headings are as follows:
sell as is Process further Incremental activity
Sales
Additional processing cost
Income(loss)
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