A Company Has Already Incurred a $12,000 Cost in Partially

question 102

Multiple Choice

A company has already incurred a $12,000 cost in partially producing its two 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? $$\begin{array} { | c | c | c | c | } \hline \text { Product } & \begin{array} { c } \text { Unfinished } \\\text { Selling Price }\end{array} & \begin{array} { c } \text { Finished } \\\text { Selling Price }\end{array} & \begin{array} { c } \text { Further } \\\text { Processing } \\\text { Costs }\end{array} \\\hline \text { A } & \$ 700 & \$ 775 & \$ 65 \\\hline \text { B } & \mathbf { 8 0 0 } & \mathbf { 8 8 8 } & \mathbf { 8 9 } \\\hline\end{array}$$

• A)Both product A and product B should be processed further.
• B)Neither product A nor product B should be processed further.
• C)Only product B should be processed further.
• D)Only product A should be processed further.
• E)A processing further decision cannot be made from the available data.

---

Definitions:

Technological Breakthrough

A significant and sudden advance in technology that dramatically changes a product, process, or industry.

Microwave Ovens

Electrical appliances used to cook or heat food by utilizing microwave radiation.

Manufacturing Cost

The total expenses incurred in the process of producing goods, including the cost of materials, labor, and overhead.

Supply

Supply is the total quantity of a good or service that is available for sale at a given price over a specified time period.