A Company Has a Process That Results in 24,000 Pounds

question 22

Multiple Choice

A company has a process that results in 24,000 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 $160,000 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 $16,000.
• B) Sell now, the company will be better off by $16,000.
• C) Process further, the company will be better off by $144,000.
• D) Sell now, the company will be better off by $160,000.

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Definitions:

Management

The process of dealing with or controlling things or people, often within an organization, including planning, decision making, organizing, leading, and controlling.

Motivation

Stimulation and inspiration to move; the leadership task of mobilizing people with different ideas, skills, and values to achieve a common mission; the experience of physical and emotional needs, progressing from basic needs for survival and security, to social needs for belonging and respect, to the complex need for fulfillment. See energize and empowerment.

Honesty

A moral character trait that involves being truthful, transparent, and free from deceit or theft.