Question

Determine if management made the correct decision to not process the table cleaner further by doing the following.

(1) Calculate the company’s total weekly gross profit assuming the table cleaner is not processed further.

Total weekly gross profit $enter total weekly gross profit in dollars

(2) Calculate the company’s total weekly gross profit assuming the table cleaner is processed further.

Total weekly gross profit

Answer 1

Weekly gross profit if not further processed = $100,700

weekly gross profit if it is further processed = $125,100

For answering the questions first we have to make a table for analysation of all the products of both the cases

Kindly refer to the tables attached

As we can see that gross profit in further processed column is higher than in not to further process column.

So management made the wrong decision as they had a loss of $24,400.

Hence , it should have been processed further.

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