Varto Company has 9,800 units of its product in inventory that it produced last year at a cost of $151,000. This year's model is better than last year's, and the 9,800 units cannot be sold at last year's normal selling price of $37 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $88,200 or (2) they can be processed further at an additional cost of $163,200 and then sold for $245,000. 

 

(a) Prepare 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?