6)

Varto Company has 11,800 units of its sole product in inventory that it produced last year at a cost of $22 each. This year?s model is superior to last year?s and the 11,800 units cannot be sold at last year?s regular selling price of $46 each. Varto has two alternatives for these items: (1) they can be sold to a wholesaler for $9 each, or (2) they can be reworked at a cost of $220,000 and then sold for $27 each. Prepare an analysis to determine whether Varto should sell the products as is or rework them and then sell them.

Please see attachment Incremental Revenue and cost of additional processing Revenue if processed further Revenue if sold as is Incremental revenue Incremental net income/loss The company should