Question

few other analysis to determent the best options are also:

Sell product at current stage of completion or process further and then sell it.

If incremental revenues are greater than incremental costs, then process further.

Relevant data: Considers:

Incremental revenues.

Incremental costs - both variable and fixed.

Irrelevant costs - Sunk costs, i.e., costs already incurred.

Any other alternatives one should consider?

Answer 1

In an analysis whether the product should be sold at current stage or processed further ,Both relevant and irrelevant data should be taken in to account.

	RELEVANT		IRRELEVANT
	Yes/No	Reason	Y/N	Reason
Additional revenue	Y	Revenue from further processing is relevant to decision as same results in incremental cash inflow	N
Additional processing cost	Y	Additional cost in relation to further processing is relevant to decision since same results in incremental cash outflow	N
Joint cost	N		Y	cost incurred till split off point is irrelevant as same is already incurred prior to decision as to further processing or not. or this cost will be incurred whether processed further or not (sunk cost)
Revenue at split off	Y	This will be an opportunity cost as revenue which can be earned at split off point is forgone .	N