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Problem 3-Sell or Process Further Surarez Corporation manufactures a certain product XYZ. This product can be sold at the end of a particular stage of
Problem 3-Sell or Process Further Surarez Corporation manufactures a certain product XYZ. This product can be sold at the end of a particular stage of production or can be further processed and sold as a completely processed product. The base case in this problem is to sell the product without further processing and the alternative is to further process the product. A partially processed product sells for P 45.00 per unit and the manufacturing cost amount to P 30.00 per unit. If the product is further processed, variable cost of P 15.00 per unit will be spent and the product can be sold at P 55.00 per unit. The estimated annual sales for this product is 30,000 units. Required: Analyze and determine the advantage and disadvantage for Suarez Corporation to sell or process further its product
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