Sell or Process Further

Great Lakes Boat Company manufactures sailboat hulls at a cost of $4,200 per unit. The hulls are sold to boat yards for $4,800. The company is evaluating the desirability of adding masts, sails, and rigging to the hulls prior to sale at an additional cost of $2,600. The completed sailboats could then be sold for $6,900 each.

Determine whether the company should sell sailboat hulls or process them further into complete sailboats. Assume sales volume will not be affected.

Calculate the netadvantage (disadvantage)of processing the boat hulls into sail boats.Use anegative signwith your answer, if appropriate.