The Scottie Sweater Company produces sweaters under the "Scottie" label. The company buys raw wool and processes it into wool yarn from which the sweaters are wowen. One spindle of wool yarn is required to produce one sweater. The costs and revenues associated with the sweaters are given below: Onigially, all of the wool yarn was used to produce sweaters, but in recent years a market has devefoped for the wool yarn itself. The yarnis purchased by other companies for use in production of wool blankets and other wool products. Since the development of the matket for the wool yarn, a continuing dispute has existed in the Scottie Sweater Company as to whether the yarn should be sold simply as yam or processed into sweoters, Current cost and revenue data on the yain are given below The market for sweaters is temporarily depiessed. due to unusually warm weather in the western states where the sweoters are sold. The market for sweaters is temporarily depressed, due to unusually warm weather in the western states where the sweaters are sold. This has made it necessary for the company to discount the solling price of the sweaters to $3100 from the normal $41.00 price. Since the market for wool yam has remained strong. the dispute has again surfaced over whether the yam should be sold outright rather than processed into sweaters. The sales manager thinks that the production of sweaters should be discontinued, she is upset about having to sell sweaters at a $2.00 loss when the yarn could be sold for a $5.00 profit. However, the production superintendent does not want to close down a large portion of the factory. He argues that the company is in the sweater business, not the yarn business, and the company should focus on its core strength All of the manufacturing overhead costs are fixed and would not be affected even if sweaters were discontinued. Manufacturing overhead is assigned to products on the basis of 150% of direct labor cost. Materials and direct labor costs are variable. Required: 1. What is the financlal advantage (disodvantage) of further processing one spindle of wool yarn into a sweater? 2. Would you recommend thot the wool yam be sold outright or processed into sweaters? 3. What is the lowest price that the company should accept for a sweater? Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) of further processing one spindle of wool yarn into a sweaten (Rlound your answer to 2 decinal places.)