What amounts are relevant to the decision about product 89?
The relevant amounts to consider in the decision about product 89 are the cost to produce it ($10,800), the selling price as is ($13,500), the additional processing costs ($4,050), and the selling price of the processed product ($18,900). These amounts are important in determining the profitability of the different options available for product 89.
Cost to Produce Product 89
The cost to produce product 89 is $10,800. This initial cost is significant as it reflects the investment made by Concord Corporation to manufacture the product. It is essential to consider this cost in evaluating the financial viability of the product and its potential profitability.
Selling Price of Product 89 as is
The selling price of product 89 as is amounts to $13,500. This figure represents the revenue that Concord Corporation would generate if they decide to sell the product without any additional processing. Understanding this selling price helps in comparing the potential profits from selling the product in its current state.
Additional Processing Costs
The additional processing costs for product 89 are $4,050. These costs are relevant as they indicate the expenses incurred by Concord Corporation if they choose to further process the product before selling it. Considering these costs is crucial in determining the impact on the overall profitability of the product.
Selling Price of Processed Product 89
The selling price of the processed product 89 is $18,900. This higher selling price reflects the potential revenue that Concord Corporation could earn if they process the product further before putting it on the market. Evaluating this price alongside the additional processing costs can help determine the profitability of this option.
By analyzing and comparing these relevant amounts, Concord Corporation can make an informed decision on whether processing product 89 further and selling it at a higher price would result in greater overall profitability compared to selling it as is.