Solution:
Sell as is | Process Further | |
Sales (a) | $ 700,000 | $ 1,372,000 |
Relevant costs: | ||
Initial Manufacturing Cost | $ 784,000 | $ 784,000 |
Additional Cost | $ - | $ 420,000 |
Total relevant costs (b) | $ 784,000 | $ 1,204,000 |
Income (loss) (a-b) | $ (84,000) | $ 168,000 |
Incremental net income(or loss) if processed further | $ 952,000 | |
The company should | Process Further |
Note:
1) Company should process further the product A into Product B and Product C, so that net income will rise from negative of $84,000 to positive of $ 168,000, leads to incremental net income of $252000.
2) Calculations:
Sell as is | Process Further | Sell as is ( Calculation) | Process Further (Calculation) | |
Sales (a) | $ 700,000 | $ 1,372,000 | Given | (5600*105)+(11200*70) |
Relevant costs: | ||||
Initial Manufacturing Cost | $ 784,000 | $ 784,000 | 28000*28 | 28000*28 |
Additional Cost | $ - | $ 420,000 | 0 | Given |
Total relevant costs (b) | $ 784,000 | $ 1,204,000 | ||
Income (loss) (a-b) | $ (84,000) | $ 168,000 | ||
Incremental net income(or loss) if processed further | $ 952,000 | $1,372,000 - $420,000 | ||
The company should | Process Further |
please answer in the format of the table given Cobe Company has already manufactured 28,000 units...
Cobe Company has already manufactured 16,000 units of Product A at a cost of $20 per unit. The 16,000 units can be sold at this stage for $490,000. Alternatively, the units can be further processed at a $290,000 total additional cost and be converted into 5700 units of Product B and 11,900 units of Product C. Per unit selling price for Product B is $105 and for Product C is $60. 1. Prepare an analysis that shows whether the 16,000...
sell or process further
Cobe Company has already manufactured 22,000 units of Product A at a cost of $30 per unit. The 22,000 units can be sold at this stage for $430,000. Alternatively, the units can be further processed at a $200,000 total additional cost and be converted into 5.000 units of Product B and 11.700 units of Product C. Per unit selling price for Product B is $104 and for Product CS $58 1. Prepare an analysis that shows...
Cobe Company has already manufactured 21,000 units of Product A at a cost of $15 per unit. The 21,000 units can be sold at this stage for $450,000. Alternatively, the units can be further processed at a $260,000 total additional cost and be converted into 5,500 units of Product B and 11,500 units of Product C. Per unit selling price for Product B is $105 and for Product C is $54. 1. Prepare an analysis that shows whether the 21,000...
Cobe Company has already manufactured 16,000 units of Product A
at a cost of $25 per unit. The 16,000 units can be sold at this
stage for $430,000. Alternatively, the units can be further
processed at a $240,000 total additional cost and be converted into
5,400 units of Product B and 11,800 units of Product C. Per unit
selling price for Product B is $103 and for Product C is $57.
1. Prepare an analysis that shows whether the
16,000...
Cobe Company has already manufactured 16,000 units of Product A at a cost of $20 per unit. The 16,000 units can be sold at this stage for $490,000. Alternatively, the units can be further processed at a $290,000 total additional cost and be converted into 5700 units of Product B and 11,900 units of Product C. Per unit selling price for Product B is $105 and for Product C is $60. 1. Prepare an analysis that shows whether the 16,000...
Cobe Company has already manufactured 16,000 units of Product A at a cost of $25 per unit. The 16,000 units can be sold at this stage for $450,000. Alternatively, the units can be further processed at a $260,000 total additional cost and be converted into 6,000 units of Product B and 11,500 units of Product C. Per unit selling price for Product B is $101 and for Product C is $51. 1. Prepare an analysis that shows whether the 16,000...
Cobe Company has already manufactured 16,000 units of Product A at a cost of $20 per unit. The 16,000 units can be sold at this stage for $490,000. Alternatively, the units can be further processed at a $290,000 total additional cost and be converted into 5700 units of Product B and 11,900 units of Product C. Per unit selling price for Product B is $105 and for Product C is $60. 1. Prepare an analysis that shows whether the 16,000...
Cobe Company has already manufactured 21,000 units of Product A at a cost of $20 per unit. The 21,000 units can be sold at this stage for $410,000. Alternatively. the units can be further processed at a $290,000 total additional cost and be converted into 5,100 units of Product B and 11,000 units of Product C. Per unit selling price for Product B is $102 and for Product C is $57 1. Prepare an analysis that shows whether the 21,000...
Exercise 23-8 Sell or process further LO A1 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 $420,000. Alternatively, the units can be further processed at a $210,000 total additional cost and be converted into 5,500 units of Product B and 11,300 units of Product C. Per unit selling price for Product B is $102 and for Product C is $59. 1....
Cobe Company has already manufactured 17,000 units of Product A at a cost of $20 per unit. The 17,000 units can be sold at this stage for $490,000. Alternatively, the units can be further processed at a $240,000 total additional cost and be converted into 5,400 units of Product B and 11,900 units of Product C. Per unit selling price for Product B is $110 and for Product C is $53. 1. Prepare an analysis that shows whether the 17,000...