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A) Prepare an incremental analysis report for Piper Corp. which can help management in this sell as-is or process further decision. B) Which is more
A) Prepare an incremental analysis report for Piper Corp. which can help management in this sell as-is or process further decision.
B) Which is more profitable for Piper Corp.: sell as-is or to further process the pipe? Why?
Piper Corp. produces pipes that it sells to companies that then customize the end of the pipes to fit their needs. In 2022 , the following cost to produce a standard 18ft PVC pipe were incurred. The selling price of the pipe is $25. The costs to manufacture the pipe are: The company is considering continuing the process to manufacture finished pipes itself. If the company processes the pipes further, the following additional costs per pipe will be incurred: direct materials $.75, Direct labor $4.60, and Variable manufacturing overhead $.50. No increase in Fixed manufacturing overhead is expected. The company can sell the finished pipes for $28.50Step by Step Solution
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