ando Company incurs a $10.00 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $5.00 per unit and sell it for $11.90 per unit. If it does so, unit sales would remain unchanged and $5.00 of the $10.00 per unit costs of Product A would be eliminated. 1. Prepare Incremental cost analysis. Should the company continue to manufacture Product A or purchase it for resale

Answer and Explanation:

The preparation of the Incremental cost analysis is presented below:

Particulars           Product A          Purchase

Sales                    $13.50                $11.90

less: cost      

Avoidable cost       $5

Unavoidable cost   $5                    $5

Purchase cost                                 $5

Net income             $3.50              $1.90

Since the net income is higher in the manfufacture  so the company should continue with manfuacture the product A

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

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answer(b); ; ; the quantitative or qualitative variable for which the experimenter wishes to determine how its value is affected by the explanatory variable;