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Excel Company has costs of $100,000 up to split off. At split off, it has 1000 units of Product A and 2000 units of Product B. Product A sells for $48 per unit and Product B sells for $62 per unit.
Excel is considering processing Product B to the next stage where it would then sell for $68 per unit. Added costs are $20,000. If they do this, what will be the effecton net income.
Net income will increase by $16,000.
Net income would decrease by $8000.
Net income would increase by $10,000.
Net income would increase by $4000.
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