Concord Corporation is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $24 and Concord would sell it for $58. The cost to assemble the product is estimated at $22 per unit and the company believes the market would support a price of $75 on the assembled unit. What decision should Concord make?

Question

Antwan Rubio

Business

22 February, 07:45

Concord Corporation is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $24 and Concord would sell it for $58. The cost to assemble the product is estimated at $22 per unit and the company believes the market would support a price of $75 on the assembled unit. What decision should Concord make?

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Answers (1)

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Ahmad Marshall · Answer 1

Concord should not sell the assembled product.

Explanation:

Unassembled:

Sell price: $58 - Cost $24 = Profit $34

Assembled:

Sell price: $75 - Cost $46 ($24 + $22) = Profit $29

Selling the assembled unit decreases the profit of Concord Corporation.