Question

The decision rule on whether to sell or process further varies from situation to situation. is process further if incremental revenue from such processing exceeds the incremental processing costs. is process further if incremental revenue from such processing exceeds incremental fixed costs. is process further as long as total revenue exceeds present revenues.

Answer 1

Answer:

The answer is process further if incremental revenue from such processing exceeds the incremental processing costs.

Explanation: Revenue is equal to the total number of products or services sold multiplied by the unit price of one product or service.

Profit is made when the total revenue exceeds the total costs incurred during a particular production process.

The decision rule on whether to sell or process further will therefore depend on whether the marginal revenue gotten will exceed the additional costs that will be incurred in bringing a product or service to the market.

Now, if the incremental revenue gotten will be higher than the incremental processing costs, then it is advised to process further, but if the incremental revenue will be lower than the incremental processing costs, then it is advised to sell.