In making the decision whether to sell a product as is or process the product further, the expected income from selling the product as is may be defined as which of the following?

Question

Quizplus · Accepted Answer

The expected income from selling the product as is represents the potential revenue that could be gained from selling the product without further processing. This is the opportunity cost of processing the product further, as the decision to process the product further involves forgoing this potential revenue stream. Option A is incorrect because a sunk cost is a cost that has already been incurred and cannot be recovered, which does not apply to the revenue from selling the product as is. Option C is incorrect because the opportunity cost refers to the potential benefits that are forgone when choosing one option over another, not the potential revenue from the chosen option. Option D may be a consideration in determining whether further processing is feasible, but it is not a definition of expected income from selling the product as is.

In Making the Decision Whether to Sell a Product as Is