Process further
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The Four Seasons Company has 12,500 units of of product called Springtime that was manufactured for a total cost of $15 per unit. The 12,500 units can be sold at this stage for $203,125. Alternatively, they can receive further processing at a total cost of $46,250 and be converted into 3,750 units of Meadowwood and 8,750 units of Seabreeze. Meadowwood can be sold for $25 per unit and Seabreeze can be sold for $16 per unit.
Prepare an analysis that shows whether the units of Springtime should be processed further.
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Solution Summary
The solution explains how to decide if the units should be sold as it is or process further and sold.
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We have to do an incremental analysis. Compare the incremental revenue to the incremental cost and if the incremental revenue ...
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