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Multiple Choice Question 109 Vaughn Manufacturing is unsure of whether to sell its product assembled or unassembled. The unit
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Answer #1

Profit Before Assembly:-

Cost of Unassembled Product = $24 Per Unit

Sale Price of Unassembled product = $51 Per Unit

Profit = Sale price - Cost price = $51 - $24 = $24 Per Unit

Profit After Assembly:-

Cost of Unassembled Product = $24 Per Unit

Cost to Assemble the product = $14 Per Unit

Cost of Assembled Product =$24 + $14 = $38 Per Unit

Sale Price of Anassembled product = $61 Per Unit

Profit = Sale price - Cost price = $61 - $38 = $23 Per Unit

Profit by selling assembled product is lesser than selling the Unassembled product by $27 (Per Unit) - $23 (Per Unit) = $4 Per Unit

Answer = Sell before assembly, The company will be better off by $4 Per Unit

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