Question
Varto Company has 9,200 units of its product in inventory that it produced last year at a cost of $155,000. This years model is better
Varto Company has 9,200 units of its product in inventory that it produced last year at a cost of $155,000. This years model is better than last years, and the 9,200 units cannot be sold at last years normal selling price of $42 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $101,200 or (2) they can be processed further at an additional cost of $163,200 and then sold for $257,600. (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?
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