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2 Varto Company has 11,600 units of its product in inventory that it produced last year at a cost of $151,000. This year's model is
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Varto Company has 11,600 units of its product in inventory that it produced last year at a cost of $151,000. This year's model is better than last year's, and the 11,600 units cannot be sold at last year's normal selling price of $37 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $162,400 or (2) they can be processed further at an additional cost of $215,600 and then sold for $371,200. (a) Prepare a sell as is or process further analysis of income effects. (b) Should Varto sell the products as is or process further and then sell them? Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 5 pounds of the material, Ike uses 2.9 pounds of the material, and Bix uses 6.1 pounds of the material. Selling price per unit and variable costs per unit of each product follow. (a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order in which management should produce and meet demandStep by Step Solution
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