Indigo Inc. makes unfinished bookcases that it sells for $57. Production costs are $37 variable and $10 fixed. Because it has unused capacity, Indigo is considering finishing the bookcases and selling them for $73. Variable finishing costs are expected to be $9 per unit with no increase in fixed costs. Prepare an analysis on a per-unit basis that shows whether Indigo should sell unfinished or finished bookcases. (If an amount reduces the net income then enter with a negative sign preceding the number, e.g.-15,000 or parenthesis, e.g. (15,000).)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Indigo Inc. makes unfinished bookcases
that it sells for $57. Production costs are
$37 variable and $10 fixed. Because it has
unused capacity, Indigo is considering
finishing the bookcases and selling them
for $73. Variable finishing costs are
expected to be $9 per unit with no
increase in fixed costs.
Prepare an analysis on a per-unit basis that
shows whether Indigo should sell
unfinished or finished bookcases. (If an
amount reduces the net income then enter
with a negative sign preceding the number,
e.g.-15,000 or parenthesis, e.g. (15,000).)
Sales per unit
Variable cost per unit
Fixed cost per unit
Total per unit cost
Net income per unit
$
$
Sel
Transcribed Image Text:Indigo Inc. makes unfinished bookcases that it sells for $57. Production costs are $37 variable and $10 fixed. Because it has unused capacity, Indigo is considering finishing the bookcases and selling them for $73. Variable finishing costs are expected to be $9 per unit with no increase in fixed costs. Prepare an analysis on a per-unit basis that shows whether Indigo should sell unfinished or finished bookcases. (If an amount reduces the net income then enter with a negative sign preceding the number, e.g.-15,000 or parenthesis, e.g. (15,000).) Sales per unit Variable cost per unit Fixed cost per unit Total per unit cost Net income per unit $ $ Sel
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