Varto Company has 10,000 units of its product in inventory that it produced last year at a cost of $158,000. This years model is better than last years, and the 10,000 units cannot be sold at last years normal selling price of $36 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $150,000 or (2) they can be processed further at an additional cost of $147,200 and then sold for $290,000.

(a) Prepare a sell as is or process further analysis of income effects.

(b) Should Varto sell the products as is or process further and then sell them?

Sell As Is Process Further (a) Sell of Process Analysis Revenue Costs Income Incremental income (loss) to sell as is (b) The company should