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The Basic Kit includes undyed, uncut reeds (with dye included) for weaving one basket. This basic package costs Anna $12 and sells for $27. The
The Basic Kit includes undyed, uncut reeds (with dye included) for weaving one basket. This basic package costs Anna $12 and sells for $27. The second kit, called Stage 2, includes cut reeds that have already been dyed. With this kit the customer need only soak the reeds and weave the basket. Anna produces the Stage 2 kit by using the materials included in the Basic Kit. Because she is more efficient at cutting and dying reeds than her average customer, Anna is able to produce two Stage 2 kits in one hour from one Basic Kit. (She values her time at $22 per hour.) The Stage 2 kit sells for $35. Your answer is partially correct. Prepare an incremental analysis for the Anna's basketweaving studio. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Sell (Basic Kit) Process Further (Stage 2 Kit) Net Income Increase (Decrease) Sales per unit 27 70 $ 52 Costs per unit Direct materials $ 12 i $ 12 $ 0 Direct labor 0 26 -26 Total $ 12 i $ 38 $ -26 Net income per unit $ 15 $ 32 $ 26
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