Question

Help Save & Ext Sub Check my work Cobe Company has already manufactured 20,000 units of Product A at a cost of $30 per unit. The 20,000 units can be sold at this stage for $500,000. Alternatively, the units can be further processed at a $290,000 total additional cost and be converted into 5,000 units of Product Band 11.100 units of Product C. Per unit selling price for Product is $106 and for Product is $59 1. Prepare an analysis that shows whether the 20,000 units of Product A should be processed further or not? Sell as is Process Further Relevant costs Totalt costs Income (los) Incrementalne income for loss) it processed further The company should process further TERONUUUUU Shin Curi

Answer 1

Cobe Company- Statement showing Analysis
	Sell as is	Process
Sales	$500,000	$1,184,900
		(5000*106+11100*59)
Relevant costs:
Costs to process further		$290,000
Total relevant costs		$290,000
Income (loss)	$500,000	$894,900
Incremental net income (or loss) if processed further		$394,900
The company should	process further

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