Sheela Dairy Corporation buys unprocessed cows' milk from local farmers. At the dairy, this unprocessed milk is broken down into cream and low-fat milk. The cream can be sold at this point or can be further processed into butter. Which of the following would be relevant in the decision to further process the cream into butter?

Question

Quizplus · Accepted Answer

The decision to further process cream into butter should consider the additional costs and revenues from processing, not the initial costs or allocated fixed expenses.

Sheela Dairy Corporation Buys Unprocessed Cows' Milk from Local Farmers