The key to analyzing a sell as is or process further decision is to determine that:
A) opportunity costs exceed sunk costs.
B) incremental revenues exceed incremental costs.
C) differential costs do not exist.
D)all allocated costs are included in the decision.

Question

Quizplus · Accepted Answer

The most important factor when analyzing a sell as is or process further decision is to compare the incremental revenues with incremental costs. If incremental revenues exceed incremental costs, it makes sense to continue with the process, otherwise, it may be more beneficial to sell the process as is. Opportunity costs, sunk costs, and allocated costs are also important factors, but they are not as critical as the incremental revenues and costs. Differential costs should be taken into account, as they are a part of the incremental costs.

The Key to Analyzing a Sell as Is or Process