Question

The decision rule on whether to sell or process further varies from situation to situation. is process further as long as total revenue exceeds present revenues. is process further if incremental revenue from such processing exceeds incremental fixed costs. is process further if incremental revenue from such processing exceeds the incremental processing costs.

Answer 1

The correct option is process further if incremental revenue from such processing exceeds the incremental processing costs.

Step-by-step explanation:

The decision to process further should be favored if the increase in revenue due processing the product further outweighs the incremental costs of processing the product further.

The option on total revenue being higher than current revenue is wrong, because the costs to incurred in processing the product further is not considered.

Answer 2

is process further if incremental revenue from such processing exceeds the incremental processing costs.

Step-by-step explanation:

If incremental revenue from such processing exceeds the incremental processing costs, it indicates that marginal revenue is greater than marginal cost and the venture is profitable so it should be processed further.

I hope my answer helps you