Eddy Company Is Starting Business and Is Unsure of Whether

question 69

Multiple Choice

Eddy Company is starting business and is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $80 and Eddy Company would sell it for $180. The cost to assemble the product is estimated at $36 per unit and Eddy Company believes the market would support a price of $232 on the assembled unit. What is the correct decision using the sell or process further decision rule?

• A) Sell before assembly, the company will be better off by $36 per unit.
• B) Sell before assembly, the company will be better off by $52 per unit.
• C) Process further, the company will be better off by $52 per unit.
• D) Process further, the company will be better off by $16 per unit.

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Definitions:

Gustation

The sense of taste, or the act of discerning flavors through receptors in the mouth.

Olfaction

The sense of smell, a chemical sense in which odorants are detected by olfactory receptors.

Retina

The light-sensitive layer of tissue at the back of the inner eye, which converts light into electrical signals sent to the brain via the optic nerve.

Light-Sensitive Film

A type of photographic film that reacts chemically to light exposure, capturing images based on the intensity and quality of light.