BE23-5 Stanton Inc. makes unfinished bookcases that it sells for $60. Production

Question

BE23-5

Stanton Inc. makes unfinished bookcases that it sells for $60. Production costs are $30 variable and $10 fixed. Because it has unused capacity, Stanton is considering finishing the bookcases and selling them for $72. Variable finishing costs are expected to increase by $8 per unit with no increase in fixed costs. Complete the analysis on a per unit basis showing whether Stanton should sell unfinished or finished bookcases. (Round your answers to 2 decimal places, e.g. 5.25. If an amount is blank enter 0, all boxes must be filled to be correct. If the impact on net income is a decrease use either a negative sign preceding the number, e.g. -45 or parenthesis, e.g. (45). Enter all other amounts as positive amounts and subtract where necessary.)

Sell

Process
Further

Net Income
Increase

(Decrease)

Sales per unit
$

$

$

Cost per unit
Variable
Fixed






Total






Net income per unit
$

$

$


The bookcases .

Explanation / Answer

net income before further processing=60-30-10=$20 net income after further processing=72-38-10=$24 net increase in income=24-20=$4 stanton should sell finished bookcases because it will increase net income by $4 per unit

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