Question
Green Inc. makes unfinished bookcases that it sells for $57. Production costs are $37 variable and $9 fixed. Because it has unused capacity, Green is
Green Inc. makes unfinished bookcases that it sells for $57. Production costs are $37 variable and $9 fixed. Because it has unused capacity, Green is considering finishing the bookcases and selling them for $70. Variable finishing costs are expected to be $7 per unit with no increase in fixed costs. Prepare an analysis on a per-unit basis that shows whether Green should sell unfinished or finished bookcases. (If an amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).)
Sell | Process Further | Net Income Increase (Decrease) | |||||
Sales per unit | $ | $ | $ | ||||
Variable cost per unit | |||||||
Fixed cost per unit | |||||||
Total per unit cost | |||||||
Net income per unit | $ | $ | $ |
The bookcases (should not be /should be) processed further |
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