Marigold Company gathered the following data about the three products that it produces: Product Present Sales Value Estimated Additional Processing Costs Estimated Sales if Processed Further A $10400 $7200 $18600 B 12400 4200 15600 C 9400 2200 13600

Marigold Company gathered the following data about the three products that it produces: Product Present Sales Value Estimated Additional Processing Costs Estimated Sales if Processed Further A $10400 $7200 $18600 B 12400 4200 15600 C 9400 2200 13600

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter12: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 12.16E: Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that...

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

Marigold Company gathered the following data about the three products that it produces:

Product	Present Sales Value	Estimated Additional Processing Costs	Estimated Sales if Processed Further
A	$10400		$7200	$18600
B	12400		4200	15600
C	9400		2200	13600

Which of the products should not be processed further?

a. Product C

b. Products A and C

c. Product B

d. Product A

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