The company should not process further as incremental loss of $12,000 in further processing .
What is Incremental Loss ?
The overall expense incurred as a result of producing one extra unit of a product is known as the incremental cost. The cost of an incremental unit of production is estimated by examining the additional costs incurred during the production process, such as raw materials. Businesses may increase production efficiency and profitability by having a better understanding of incremental expenses.
Since incremental costs are the expenses spent while producing an additional unit, they wouldn't exist if production stayed the same. Typically, incremental costs are less expensive to manufacture than unit average costs. Variable costs, or expenses that vary with production levels, are always a part of incremental costs.
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