q4

Varto Company has 13,800 units of its sole product in inventory that it produced last year at a cost of $30 each. This years model is superior to last years, and the 13,800 units cannot be sold at last years regular selling price of $55 each. Varto has two alternatives for these items: (1) they can be sold to a wholesaler for $10 each or (2) they can be processed further at a cost of $254,500 and then sold for $28 each. Should Varto sell the products as is or process further and then sell them?

INCREMENTAL REVENUE AND COST OF ADDITIONAL PROCESSING Revenue if processed further Revenue if sold as is Incremental revenue Incremental net income(Loss) The company should