Digger Company realizes three products from a single mining process: Products J1, A2, and V3. Each product may be sold as is in its raw form or processed further into a more refined state. The additional processing requires no expanded capacity and production costs are entirely variable. Sales values and cost information are presented below: If processed further Product Units produced Sale Value as is Sales value Additional costs J1 14,000 $60,000 $100,000 $22,000 A2 10,000 $100,000 $108,000 $16,000 V3 6,000 $58,000 $78,000 $20,000 (a.) Determine whether Digger Company should sell each product as is or after further processing.
Digger Company realizes three products from a single mining process: Products J1, A2, and V3. Each product may be sold as is in its raw form or processed further into a more refined state. The additional processing requires no expanded capacity and production costs are entirely variable. Sales values and cost information are presented below:
If processed further
Product Units produced Sale Value as is Sales value Additional costs
J1 14,000 $60,000 $100,000 $22,000
A2 10,000 $100,000 $108,000 $16,000
V3 6,000 $58,000 $78,000 $20,000
(a.) Determine whether Digger Company should sell each product as is or after further
processing.
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