Question
Vaughn Toy Company is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $35 and Vaughn
Vaughn Toy Company is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $35 and Vaughn Toy Company would sell it for $68. The cost to assemble the product is estimated at $21 per unit and Vaughn Toy Company believes the market would support a price of $83 on the assembled unit. What decision should Vaughn Toy make?
Process further, the company will be better off by $29 per unit.
Sell before assembly: the company will be better off by $6 per unit.
Process further, the company will be better off by $12 per unit.
Sell before assembly: the company will be better off by $15 per unit.
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