Question
Sheffield Inc. makes unfinished bookcases that it sells for $58. Production costs are $37 Wariable and $10 fixed. Because it has unused capacity, Sheffield is
Sheffield Inc. makes unfinished bookcases that it sells for $58. Production costs are $37 Wariable and $10 fixed. Because it has unused capacity, Sheffield is considering finishing the bookcases and selling them for $74. Variable finishing costs are expected to be $9 per unit with no increase in fixed costs.
Prepare an analysis on a per-unit basis that shows whether Sheffield 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).)
Sheffield Inc. makes unfinished bookcases that it sells for $58. Production costs are $37 variable and $10 fixed. Because it has unused capacity, Sheffield is considering finishing the bookcases and selling them for $74. Variable finishing costs are expected to be $9 per unit with no increase in fixed costs. Prepare an analysis on a per-unit basis that shows whether Sheffield 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).) Sales per unit Variable cost per unit Fixed cost per unit +A $ Sell Total per unit cost $ Net income per unit +A The bookcases should be should not be processed further. Net Income Process Further Increase (Decrease) $ $ $
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