Question 21

Cobe Company has already manufactured 22,000 units of Product A at a cost of $25 per unit. The 22,000 units can be sold at this stage for $460,000. Alternatively, the units can be further processed at a $300,000 total additional cost and be converted into 5,400 units of Product B and 11,500 units of Product C. Per unit selling price for Product B is $109 and for Product C is $58. 1. Prepare an analysis that shows whether the 22,000 units of Product A should be processed further or not? Sell as is Process Further Sales Relevant costs Total relevant costs Income (los) Incremental net income (or loss) if processed further The company should