Sell or Process-Further Decision
E 14. Six Star Pizza manufactures frozen pizzas and calzones and sells them for $4 each. It is currently considering a proposal to manufacture and sell fully prepared products. The following relevant information has been gathered by management:
|
Product |
Sales Revenue if No Additional Processing |
Sales Revenue if Processed Further |
Additional Processing Costs |
|
Pizza |
$4 |
$ 8 |
$5 |
|
Calzone |
4 |
10 |
5 |
Use incremental analysis to determine which products Six Star should offer.