CSLO-C07-ABE07-5

Pine Street Inc. makes unfinished bookcases that it sells for $59. Production costs are $38 variable and $10 fixed. Because it has unused capacity, Pine Street is considering finishing the bookcases and selling them for $75. Variable finishing costs are expected to be $8 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. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		Sell		Process Further		Net Income Increase (Decrease)
Sales price per unit		$enter the sales price per unit in dollars		$enter the sales price per unit in dollars		$enter the sales price per unit in dollars
Cost per unit
Variable		enter the variable cost per unit in dollars		enter the variable cost per unit in dollars		enter the variable cost per unit in dollars
Fixed		enter the fixed cost per unit in dollars		enter the fixed cost per unit in dollars		enter the fixed cost per unit in dollars
Total		enter a subtotal of the two previous amounts		enter a subtotal of the two previous amounts		enter a subtotal of the two previous amounts
Net income per unit		$enter net income per unit in dollars		$enter net income per unit in dollars		$enter net income per unit in dollars

The bookcases Should be sold without further processing or Should be processed further?