Eddy Company is starting business and is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $80 and Eddy Company would sell it for $180. The cost to assemble the product is estimated at $36 per unit and Eddy Company believes the market would support a price of $232 on the assembled unit. What is the correct decision using the sell or process further decision rule?
A) Sell before assembly, the company will be better off by $36 per unit.
B) Sell before assembly, the company will be better off by $52 per unit.
C) Process further, the company will be better off by $52 per unit.
D) Process further, the company will be better off by $16 per unit.
Correct Answer:
Verified
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