Process and sell related problem


A company has a process that results in 15,000 pounds of Product X that can be sold for $8 per pound. An alternative would be to process Product X further at a cost of $100,000 and then sell it for $14 per pound. Should management sell Product X now or should Product X be processed further and then sold?

a) Process further, the company will be better off by $10,000.

b) Sell now, the company will be better off by $10,000.

c) Process further, the company will be better off by $90,000.

d) Sell now, the company will be better off by $100,000.

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Accounting Basics: Process and sell related problem
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