Coggin Company Gathered the Following Data About the Three Products

question 6

Multiple Choice

Coggin Company gathered the following data about the three products that it produces: $\begin{array}{llll}&\text { Estimated Sales }\\\text { Present } & \text { Value before } & \text { Additional } & \text { Estimated Sales }\\\underline{\text { Product }} &\underline{\text { Processing} } &\underline{\text { Processina Costs }} &\underline{ \text { if Processed Further }}\\\mathrm{A} & \$ 9,000 & \$ 6,000 & \$ 16,000 \\\mathrm{~B} & 15,000 & 5,000 & 18,000 \\\mathrm{C} & 11,000 & 8,000 & 16,000\end{array}$
Which of the products should be processed further?

• A)Product A
• B)Product B
• C)Product C
• D)all three products

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Definitions:

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future.

Accounts Receivable

Amounts owed to a company by customers for goods or services provided on credit.

Inventories

Assets held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials or supplies to be consumed in the production process or in the rendering of services.

Depreciation Expense

The allocated portion of the cost of a tangible or physical asset that is charged as an expense over its useful life.