Question

Pine Street Inc. makes unfinished bookcases that it sells for $58.09. Production costs are $37.97 variable and $10.12 fixed. Because it has unused capacity, Pine Street is considering finishing the bookcases and selling them for $73.08. Variable finishing costs are expected to be $6.64 per unit with no increase in fixed costs. Prepare an analysis on a per unit basis showing whether Pine Street should sell unfinished or finished bookcases. (Round answers to 2 decimal places, e.g. 15.25. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Answer 1

Check the table in the explanation

Step-by-step explanation:

Differential analysis

Sell Process Net income unfinished further increase (decrease)

Sale price per unit 58.09 73.08 14.99

Cost per unit

variable 37.97 44.61 -6.64

Fixed 10.12 10.12 0

total 48.09 54.73 8.35

Net income per unit 10 18.35 8.35

The book cases should be sold after processed further