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I was reading the technical articles on relevant cost and i came across example 5, further processing decision. According to the article the incremental revenue for product A is 12000 and for product B is 15000. In the solution net revenue was used . Please could you explain
If there is further processing, then it is worth doing it provided that the extra revenue that will be earned is more than the extra cost that will be incurred (the excess is the net revenue). If the extra revenue is more than the extra cost then the profit will be higher and it is worthwhile.
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