Coronado Industries is starting business and is unsure of whether to sell its pr

Question

Coronado Industries is starting business and is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $60 and Coronado Industries would sell it for $135. The cost to assemble the product is estimated at $21 per unit and Coronado Industries believes the market would support a price of $168 on the assembled unit. What is the correct decision using the sell or process further decision rule? Sell before assembly, the company will be better off by $33 per unit. Process further, the company will be better off by $12 per unit. Process further, the company will be better off by $33 per unit. Sell before assembly, the company will be better off by $21 per unit.

Explanation / Answer

market support price 168

less cornado industries would it sell for 135

less assemble product cost estimated 21 = 12

so answer is

process further, the company will be better off by $12 per unit

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