It costs Camp,Inc.$35 per unit to manufacture 1,000 units per month of a product that it can sell for $50 each.Alternatively,Camp could process the units further into a more complex product,which would cost an additional $30 per unit.Camp could sell the more complex product for $75 each.How would processing the product further affect Camp's profit?
A)Profit would increase by $5,000.
B)Profit would increase by $25,000.
C)Profit would decrease by $5,000.
D)Profit would decrease by $25,000.

Question

Quizplus · Accepted Answer

Processing the product further increases the cost by $30 per unit, making the total cost $65 per unit. Selling at $75 per unit results in a profit of $10 per unit. Without further processing, the profit is $15 per unit ($50 - $35). Thus, profit decreases by $5 per unit for 1,000 units, totaling a $5,000 decrease.

It Costs Camp,Inc