A Company Has the Choice of Either Selling 1,000 Unfinished

question 33

Multiple Choice

A company has the choice of either selling 1,000 unfinished units as is or completing them.The company could sell the unfinished units as is for $4.00 per unit.Alternatively,it could complete the units with incremental costs of $1.00 per unit for direct materials,$2.00 per unit for direct labor,and $1.50 per unit for overhead,and then sell the finished units for $8.00 each.What should the company do?

• A)Sell the units as is.
• B)Finish the units.
• C)It does not matter because both alternatives have the same result.
• D)Neither sell nor finish because both alternatives produce a loss.Instead,the company should store the units permanently.
• E)Donate the units.

---

Definitions:

Incus

A small anvil-shaped bone in the middle ear that transmits sound vibrations from the malleus to the stapes.

Cerumen

A yellowish waxy substance secreted in the ear canal, known as earwax.

Otopyorrhea

The discharge of pus from the ear, often resulting from an ear infection.

Endolymph

A fluid contained in the membranous labyrinth of the inner ear, crucial for hearing and balance.