Carlos Naturals manufactures bulk quantities of cleaning fluids
The company currently sells 700 containers a month at a sales price of $22 per unit. The addition of a new disinfectant will result in a sales price of $25 per unit for the improved product. It would cost a total of $3,800 per month to make the alteration. Operating income would ________.
A) decline by $15,400
B) increase by $3,800
C) increase by $1,700
D) decline by $1,700
D .D)
Sell as is Process further
Sales revenue $15,400 $17,500
Less: Additional cost 3,800
Operating income $15,400 $13,700
Operating income will decline by $1,700 ($15,400 - $13,700 ) if it's further processed.
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