JK Company Has a Process That Results in 15000 Pounds

question 215

Multiple Choice

JK Company has a process that results in 15000 pounds of Product A that can be sold for $8 per pound. An alternative would be to process Product A further at a cost of $100000 and then sell it for $14 per pound. Should management sell Product A now or should Product A be processed further and then sold? What is the effect of the action?

• A) Process further the company will be better off by $10000.
• B) Sell now the company will be better off by $10000.
• C) Process further the company will be better off by $90000.
• D) Sell now the company will be better off by $100000.

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