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 Selling Price after Processing urther Additional Processing Cost Number of Units Product Pants Shirts Coats 6,000 12,000 4,000 $28,450 64.400 18,300 23.20 38.80 32.40 43.20