A company should process its product further if the additional revenue from further processing exceeds the additional cost of further processing.

Question

Quizplus · Accepted Answer

This statement is known as the "processing decision rule" and is widely taught in managerial accounting. It suggests that a company should continue processing a product if the incremental revenue from the additional processing exceeds the incremental cost of that processing. This helps companies to make informed decisions about whether additional processing is worth the investment required.

A Company Should Process Its Product Further If the Additional