A Company Has Already Incurred a $55,000 Cost in Partially

question 109

Multiple Choice

A company has already incurred a $55,000 cost in partially producing its three products. Their selling prices when partially and fully processed are shown in the following table with the additional costs necessary to finish their processing. Based on this information, should any products be processed further? $$\begin{array} { | l | c | c | c | } \hline \text { Product } & \begin{array} { c } \text { Unfinished } \\\text { Selling Price }\end{array} & \begin{array} { c } \text { Finished } \\\text { Selling Price }\end{array} & \begin{array} { c } \text { Further } \\\text { Processing Cost }\end{array} \\\hline \mathrm { A } & \$ 72 & \$ 108 & \$ 35 \\\hline \mathrm { B } & 83 & 124 & 42 \\\hline \mathrm { C } & 94 & 141 & 45 \\\hline\end{array}$$

• A) All of these products should be processed further.
• B) None of these products should be processed further.
• C) Products A and B should be processed further.
• D) Products B and C should be processed further.
• E) Products A and C should be processed further.

Understand and identify examples of Parkinson's Law in organizational contexts.

Recognize industries that benefit from economies of scale and those that do not.

Understand the concept and implications of marginal cost in production.

Grasp the concept and effects of the law of diminishing returns in various sectors.

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Definitions:

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