Brief Exercise 26-5

Pine Street Inc. makes unfinished bookcases that it sells for $59.19. Production costs are $37.72 variable and $9.57 fixed. Because it has unused capacity, Pine Street is considering finishing the bookcases and selling them for $73.16. Variable finishing costs are expected to be $7.41 per unit with no increase in fixed costs. Prepare an analysis on a per unit basis showing whether Pine Street should sell unfinished or finished bookcases. (Round answers to 2 decimal places, e.g. 15.25. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Sell Unfinished	Process Further	Net Income Increase (Decrease)
Sales price per unit	$	$	$
Cost per unit
Variable
Fixed
Total
Net income per unit	$	$	$

The bookcases should be sold without further processingshould be processed further.