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Sheffield Inc. makes unfinished bookcases that it sells for $57.25. Production costs are $37.51 variable and $9.99 fixed. Because it has unused capacity, Sheffield is
Sheffield Inc. makes unfinished bookcases that it sells for $57.25. Production costs are $37.51 variable and $9.99 fixed. Because it has unused capacity, Sheffield is considering finishing the bookcases and selling them for $72.16. Variable finishing costs are expected to be increased by $8.45 per unit with no increase in fixed costs. Prepare an analysis on a per unit basis showing whether Sheffield should sell unfinished or finished bookcases
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Sheffield Inc. makes unfinished bookcases that it sells for $57.25. Production costs are $37.51 variable and $9.99 fixed. Because it has unused capacity, Sheffield is considering finishing the bookcases and selling them for $72.16. Variable finishing costs are expected to be increased by $8.45 per unit with no increase in fixed costs. Prepare an analysis on a per unit basis showing whether Sheffield should sell unfinished or finished bookcases. (Round answers to 2 decimal places, e.g. 15.25. If amount decreases net income then enter the amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Sell Unfinished Process Further Net Income Increase (Decrease) Sales price per unit $ 57.25 72.16 14.91 Cost per unit Variable Fixed 37.51 9.99 i 47.50 i 9.99 Total Net income per unit $ 9.75Step by Step Solution
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