General Foods Corporation has many major US product divisions included Post Kool Aid Maxwell House Jell O and Bird Eye. Now General Foods is looking forward in starting a new project i.e. Super Project. Super is a new instant dessert based on flavored water soluble and agglomerated powder. Manager financial analysis has a notion that sunk cost is relevant in the evaluation of super project. The sunk cost in this case includes the cost of the capacity of Jell O building and agglomerator utilized by the super project. While evaluating the project in incremental basis the overhead capital and expenses are not included; as incremental basis only includes the cost that could be directly identified with the decision to accept super project. Now the question is whether the sunk costs overhead capital and overhead expenses should be taken into account while evaluating the project or not if yes then how Or if any one of sunk cost and overhead cost should be accounted for casetutors/8/Super-Project.html
Posted on: Fri, 12 Jul 2013 13:21:26 +0000
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