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Turner manufacturing company makes a partially completed assembly unit that sells for $53 per unit. Normally, 38,000 units are sold each year. Variable unit cost
Turner manufacturing company makes a partially completed assembly unit that sells for $53 per unit. Normally, 38,000 units are sold each year. Variable unit cost on data on the assembly are as follows:
direct material-$12
Direct labor-7
Variable manufacturing overhead-9
The company is now only using 75% of its normal capacity; it could fully use its normal capacity by processing the assembly further and selling it for $61 per unit. if the company does this, material and labor costs will each increase by $2 per unit and variable overhead will go up by $1 per unit. Fixed costs will increase from the current level of $125,000 to $168,000.
prepare an analysis showing whether Turner should process the assemblies further. use a negative sign with answer to only indicate a loss from processing assemblies further; otherwise do not use negative signs with your answers.
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