Varto Company has 7,000 units of its sole product in inventory that it produced last year at a cost of $34 each. This years model is superior to last years, and the 7,000 units cannot be sold at last years regular selling price of $50 each. Varto has two alternatives for these items: (1) they can be sold to a wholesaler for $14 each or (2) they can be processed further at a cost of $139,400 and then sold for $33 each. Should Varto sell the products as is or process further and then sell them?

INCREMENTAL REVENUE AND COST OF ADDITIONAL PROCESSING
Revenue if processed further
Revenue if sold as is
Incremental revenue	0
Incremental net income(Loss)	$0
The company should: