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julsineya [31]
3 years ago
13

"stooge enterprises manufactures ceiling fans that normally sell for? $90 each. there are 300 defective fans in? inventory, whic

h cost? $55 each to manufacture. these defective units can be sold as is for? $20 each, or they can be processed further for a cost of? $40 each and then sold for the normal selling price. stooge enterprises would be better off by a"
Business
1 answer:
Oliga [24]3 years ago
4 0

<span>We know that Profit = Earnings  - Cost</span>

Case 1: Sold as is

Profit = (300 fans* $20/fan) - (300 fans* $55/fan)

Profit = - $10, 500 (deficit)

 

Case 2: Processed further then sell

Profit = (300 fans* $90/fan) – [(300 fans* $55/fan) + (300 fans* $40/fan)]

Profit = - $1, 500 (deficit)

 

<span>Since Case 2 has lower deficit, then it is better to process the fans further then sell to normal selling price.</span>

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