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

question 9

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 table below with the additional costs necessary to finish their processing. Based on this information, should any products be processed further?
$$\begin{array} { | c | c | c | c | } \hline \text { Product } & \begin{array} { c } \text { Unfinished } \\\text { Selling Price }\end{array} & \begin{array} { c } \text { Finished } \\\text { Selling Price }\end{array} & \begin{array} { c } \text { Further } \\\text { Processing } \\\text { Costs }\end{array} \\\hline \text { A } & \$ 700 & \$ 775 & \$ 65 \\\hline \text { B } & \$ 800 & \$ 888 & \$ 89 \\\hline\end{array}$$

• 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.

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Definitions:

ATP Synthesis

The process by which energy is stored in the form of adenosine triphosphate (ATP) in cells, commonly occurring in the mitochondria via cellular respiration.

Electron Transfer Chain

In a cell membrane, series of enzymes and other molecules that accept and give up electrons, thus releasing the energy of the electrons in small, usable steps.

ATP Synthesis

The biochemical process creating ATP (adenosine triphosphate), the primary energy carrier in cells, through cellular respiration or photosynthesis.