Yellowtail Manufacturing makes a product that is currently sold to health food stores. It recently has discovered

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Yellowtail Manufacturing makes a product that is currently sold to health food stores. It recently has discovered it could sell its product, Real Yellow, at an earlier stage in its production to another manufacturer. Current costs to complete the Real Yellow product are $5 per pound. It sells for $6 per pound. It could sell Yellow Only for $4.25 per pound when it is only 75% complete as to total costs.


REQUIRED:

a. Should Yellowtail continue to make the product Real Yellow or sell it as Yellow Only?

b. Why or why not?

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Related Book For  book-img-for-question

Managerial Accounting An Integrative Approach

ISBN: 9780999500491

2nd Edition

Authors: C J Mcnair Connoly, Kenneth Merchant

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