The basic decision rule in a sell or process further decision is: sell without further processing as long as the incremental revenue from processing exceeds the incremental processing costs.

Incremental Revenue

The additional revenue generated from a new business activity or decision.

Incremental Processing Costs

Additional costs incurred when increasing the production volume or when processing further beyond the split-off point.

Sell or Process Further

A decision-making process in cost accounting where a company must determine whether to sell a product as is or continue processing to add value.