Kando company incurs a $9 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 per unit and sell it for $12 per unit. if it does so, unit sales would remain unchanged and $5 of the $9 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

Since sales will be unaffected profit per unit is more in Sale Purchase, therefore, the company shall purchase and then sell as incremental profit = $7 - $4.50 = $2.50

Explanation:

Provided details

In case of manufacturing =

Cost = $9.00

Selling Price = $13.50

Profit per unit = $13.50 - $9 = $4.50

In case of purchase and sale

Cost = $5.00

Selling Price = $12

Profit = $12 - $5 = $7 per unit

Since sales will be unaffected profit per unit is more in Sale Purchase, therefore, the company shall purchase and then sell as incremental profit = $7 - $4.50 = $2.50

answer; /// i do believe the correct answer is (30,000);

i believe it’s b because the rest don’t make sense