Question
Sunland Company is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $20 and Sunland would
Sunland Company is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $20 and Sunland would sell it for $54. The cost to assemble the product is estimated at $17 per unit and the company believes the market would support a price of $60 on the assembled unit. What decision should Sunland make and why?
Sell before assembly because the company will be better off by $6 per unit.
Process further because the company will be better off by $9 per unit.
Process further because the company will be better off by $17 per unit.
Sell before assembly because the company will be better off by $11 per unit.
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