A Company Has Already Incurred a $55,000 Cost in Partially

question 94

Multiple Choice

A company has already incurred a $55,000 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?
$\begin{array}{|c|c|c|c|}\hline \text { Product } & \begin{array}{c}\text { Unfinished } \\\text { Selling Price }\end{array} & \begin{array}{c}\text { Finished } \\\text { Selling Price }\end{array} & \begin{array}{c}\text { Further } \\\text { Processing } \\\text { Costs }\end{array} \\\hline \mathrm{A} & \$ 72 & \$ 108 & \$ 35 \\\hline \mathrm{B} & \$ 83 & \$ 124 & \$ 42 \\\hline \mathrm{C} & \$ 94 & \$ 141 & \$ 45 \\\hline\end{array}$

• A) All of these products should be processed further.
• B) None of these products should be processed further.
• C) Products A and B should be processed further.
• D) Products B and C should be processed further.
• E) Products A and C should be processed further.

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Definitions:

McDonaldization

Describes the process by which the principles of the fast-food industry, such as efficiency, calculability, predictability, and control, have come to dominate other sectors of society.

Fast-Food Restaurants

Eateries that serve food quickly and efficiently, often part of a chain, and typically offer a limited menu of items that are prepared in advance and kept warm until sold.

Rationality

The quality of being based on or in accordance with reason or logic.

Colonialism

The practice of acquiring full or partial political control over another country, occupying it with settlers, and exploiting it economically.