Swifty Corporation spent $4400 to produce Product 89, which can be sold as is for $5500, or processed further incurring additional costs of $1650 and then be sold for $7700. Which amounts are relevant to the decision about Product 89

Question

Paityn Mckay

Business

23 November, 16:51

Swifty Corporation spent $4400 to produce Product 89, which can be sold as is for $5500, or processed further incurring additional costs of $1650 and then be sold for $7700. Which amounts are relevant to the decision about Product 89

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Answers (1)

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Precious Vincent · Answer 1

Relevant:

$5,500

$1,650

$7,700

Explanation:

The only data irrelevant is the first production cost. The $4,400 is not relevant because it is a sunk cost. It will remain constant in both choices. The other costs and income are relevant because they vary on each decision. The $4,400 should not be a part of the decision making process.