(Solved):Our company produces a product that is currently sold for $50 per unit. We are considering…

 

Question

Our company produces a product that is currently sold for $50 per unit. We are considering processing it further into an upgraded version of the current product. If we do so, we can sell the product for $60, we will incur additional costs of $75,000, and we can sell 8,000 units. Which of the following is true?

a. Sell now at $50 since doing so will maximize operating income.

b. Process further

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