Question

Concord Corporation is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $24 and Concord would sell it for $45. The cost to assemble the product is estimated at $8 per unit and the company believes the market would support a price of $51 on the assembled unit. What decision should Concord make?

Answer 1

Sell by $2 per unit before assembly, the company would be better off.

Step-by-step explanation:

The decision of Concord with the help of computation is shown below:-

Profit = Selling price - Cost

= $45 - $24

= $21

Assembled product:-

Cost = $24 + $8

= $32

Profit = Selling price - Cost

= $51 - $32

= $19

Therefore, Sell by $2 per unit before assembly, the company would be better off.