Chino Company manufactures fabric and clothing. Managers can either sell the unfinished fabric to other clothing manufacturers or incur additional conversion costs to create a finished garment. The costs incurred to produce the unfinished fabric are $400,000, which are allocated to the products based on the sales value of the unfinished fabric. Following is information concerning the clothing that can be produced from the fabric: Selling Price of Unfinished Fabric Number of Product Pants Units 6,000 Shirts 12,000 23.20 Coats 4,000 38.80 $20.00 Selling Price after Processing Further $30.00 32.40 43.20 Additional Processing Cost $28,450 64,400 18,300 Required: 2-a. Calculate the increase or decrease in profit if the products are processed further. 2-b. Which products should be sold as unfinished fabric and which should be further processed? 3. Assume that the $400,000 in costs is allocated based on the number of units of output. Which products should be sold as unfinished fabric and which should be further processed?