A Company Has Already Incurred a $24,000 Cost in Partially

question 7

Multiple Choice

A company has already incurred a $24,000 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?
$$\begin{array} { | c | c | c | c | } \hline \text { Product } & \begin{array} { c } \text { Unfinished } \\\text { Selling Price }\end{array} & \begin{array} { c } \text { Finished } \\\text { Selling Price }\end{array} & \begin{array} { c } \text { Further } \\\text { Processing } \\\text { Costs }\end{array} \\\hline \text { A } & \$ 900 & \$ 1,000 & \$ 65 \\\hline \text { B } & \$ 600 & \$ 675 & \$ 76 \\\hline\end{array}$$

• 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:

Collective Agreement

A written contract between employers and a group of employees, typically represented by a union, that details terms and conditions of employment.

Final Settlement

The conclusive resolution and payment of all dues or claims at the end of a contract, employment, or legal dispute.

All Jurisdictions

Refers to every area or sector under legal or governmental authority.

Managing Change

The process of guiding an organization through transitions or adjustments to its operations or culture.