A Company Has Already Incurred an $81,000 Cost in Partially

question 117

Essay

A company has already incurred an $81,000 cost in partially producing its three products.Their selling prices when partially and fully processed are shown in the table below with the additional costs necessary to finish their processing.Based on this information, should any products be processed further?
$$\begin{array} { | c | c | c | c | } \hline \text { Product } & \begin{array} { c } \text { Unfinished } \\\text { Selling Price }\end{array} & \begin{array} { c } \text { Finished } \\\text { Selling Price }\end{array} & \begin{array} { c } \text { Further } \\\text { Processing } \\\text { Costs }\end{array} \\\hline \text { A } & \$ 43.20 & \$ 81.10 & \$ 29.74 \\\hline \text { B } & \$ 51.16 & \$ 85.73 & \$ 36.61 \\\hline \text { C } & \$ 70.50 & \$ 97.22 & \$ 23.32 \\\hline\end{array}$$

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Definitions:

Total Revenue

The overall amount of money generated by a firm from its sales activity, reflecting its business performance.

Demand Curves

Graphical representations showing the relationship between the price of a good or service and the quantity demanded by consumers at those prices.

Midpoint Method

The midpoint method is a technique used in economics to calculate the elasticity of a variable with respect to another, using the midpoint between two points on a curve to avoid bias from using either endpoint.

Absolute Value

A numerical value without regard to its sign, symbolized as |x|, representing the distance of a number on the number line from the origin.