Pine Street Inc. makes unfinished bookcases that it sells for $59. Production costs are $38 variable and $10 fixed. Because it has unused capacity, Pine Street is considering finishing the bookcases and selling them for $75. Variable finishing costs are expected to be $8 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. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Pine Street Inc. makes unfinished bookcases that it sells for $59. Production costs are $38 variable and $10 fixed. Because it has unused capacity, Pine Street is considering finishing the bookcases and selling them for $75. Variable finishing costs are expected to be $8 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. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Homework for Ch 20 LO 4 - Sell vs. Process Further
Question 1 of 2
Sales price per unit
Pine Street Inc. makes unfinished bookcases that it sells for $59. Production costs are $38 variable and $10 fixed. Because it has
unused capacity, Pine Street is considering finishing the bookcases and selling them for $75. Variable finishing costs are expected to be
$8 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. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Cost per unit
Variable
Fixed
Total
Net income per unit
$
Sell
The bookcases should be processed further
38
10
59
IN
48 i
11
tA
Process
Further
75
8
O
8
67
0.44/1
$
Net Income
Increase (Decrease)
-16
30
10
40
E :
-56](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F17131f96-6adc-42bc-a824-aa6fc6cf83c6%2F03a39685-d1c7-49d2-b01c-6af08227c1c8%2F06q6kt2_processed.png&w=3840&q=75)
Transcribed Image Text:Homework for Ch 20 LO 4 - Sell vs. Process Further
Question 1 of 2
Sales price per unit
Pine Street Inc. makes unfinished bookcases that it sells for $59. Production costs are $38 variable and $10 fixed. Because it has
unused capacity, Pine Street is considering finishing the bookcases and selling them for $75. Variable finishing costs are expected to be
$8 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. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Cost per unit
Variable
Fixed
Total
Net income per unit
$
Sell
The bookcases should be processed further
38
10
59
IN
48 i
11
tA
Process
Further
75
8
O
8
67
0.44/1
$
Net Income
Increase (Decrease)
-16
30
10
40
E :
-56
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