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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
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 Number of of Unfinished Selling Price after Additional Product Unita Pabrie Processing Purther Procenning cost 6,000 $20.00 $30.00 $28,450 Shirts 12,000 32.40 64.400 Coats 4.000 38.80 43.20 18,300 Panta 23.20 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? Complete this question by entering your answers in the tabs below. Reg 2 Reg 28 Reg 3 Calculate the increase or decrease in profit if the products are processed further. (Decreases should be entered as a negative value) Profit Pants Shirts Coats Roq 28 > 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? Complete this question by entering your answers in the tabs below. Reg 2A Reg 28 Reg 3 Which products should be sold as unfinished fabric and which should be further processed? Action Pants Shirts Coats Required: 2-a. Calculate the increase or decrease in profit if the products are processed further 2-6. 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? Complete this question by entering your answers in the tabs below. Reg 2A Reg 28 Reg 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? Action Pants Shirts Coats
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