Answer:
The correct answer is management should sell Product A now.
Explanation:
According to the scenario, computation of the given data are as follows:
Total production = 12,000 pounds
Sell price = $8 per pound
If process further, Cost = $80,000
Selling price = $14 per pound
So, If we sell the product without further process, than
Total sale value = 12,000 × $8 = $96,000
And, if we sell the product after further processing, then
Total sale value = (12,000 × $14) - $80,000
= $88,000.
As, sales value is more in selling the product without further process, so management should sell the product without further processing it.
