Your answer is partially correct. Try again Pine Street Inc. makes unfinished bo

Question

Your answer is partially correct. Try again Pine Street Inc. makes unfinished bookcases that it sells for $57.87. Production costs are $37.72 variable and $9.68 fixed. Because it has unused capacity, Pine Street is considering finishing the bookcases and selling them for $70.53. Variable finishing costs are expected to be $7.92 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).) Sell Unfinished Process Further Net Income Increase (Decrease) Sales price per unit 57.87 70.53 12.66 Cost per unit Variable 37.72 Fixed 9.68 9.68 Total 47.4 Net income per unit The bookcases should be processed further

Explanation / Answer

Answer:-

The bookcases should be processed further due to higher income, hence net income will increase by $4.74 per unit.

Particulars Sell unfinshed Process further Net income Increase (decrease) Sales price per unit 57.87 70.53 12.66 Cost per unit:- Variable 37.72 37.72+7.92 = 45.64 -7.92 Fixed 9.68 9.68 Nil Total 47.4 55.32 -7.92 Net income per unit 10.47 15.21 4.74

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