Complete this question by entering your answers in the tabs below. Would you recommend that the wool yarn be sold outright or processed into sweaters? Complete this question by entering your answers in the tabs below. What is the lowest price that the company should accept for a sweater? (Round your answer to 2 decimal places.) The Scottie Sweoter Company produces sweoters under the "Scottie" lobel. The compony buys raw wool and processes it into wool yorn from which the sweaters ore woven. One spindle of wool yorn is required to produce one sweoter. The costs and revenues associoted with the sweoters are given below: Originally, all of the wool yorn wos used to produce sweoters, but in recent years a morket hos developed for the wool yatn itself. The yorn is purchosed by other componies for use in production of wool blankets ond other wool products. Since the development of the market for the wool yorn, o continuing dispute has existed in the Scottie Sweater Compony os to whether the yorn should be sold simply os yam or processed into sweoters. Current cost ond revenue dato on the yom ore given below. The morket for sweaters is tempororily depressed, due to unusually worn weother in the western stotes where the sweoters ore sold. This has mode it necessary for the company to discount the seling price of the sweoters to $33.00 from the normal $43.00 price. Since the market for wool yorn hos remoined strong. the dispute hos ogoin surfoced over whether the yorn should be sold outright rother thon processed into sweoters. The soles monoger thinks thot the production of sweoters should be discontinued; she is upset about hoving to sell sweoters at o $4.50 loss when the yorn could be sold for o $4.00 profit. However, the production superintendent does not want to close down a large portion of the foctory. He argues that the compony is in the sweater business, not the yorn business, and the compony should focus on its core strength. All of the manufocturing overhead costs ore foced and would not be offected even if sweoters were discontinued. Manufocturing overheod is ossigned to products on the bosis of 150% of direct labor cost. Motenols and direct labor costs are varioble. Required: 1. What is the finenciol advantoge (disodvantoge) of further processing one spincle of wool yorn into a sweater? 2. Would you recommend that the wool yarn be sold outright or processed into sweaters? 3. What is the lowest price thot the compony should accept for o sweoter? Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) of further processing one spindle of wool yare into a sweater? (Round your answer to 2 decimal places
