Sell or Process FurtherManufacturing Company makes a partially completed assembly unit that it sells for $55 per unit. Normally, 33,000 units are sold each year. Variable unit cost data on the assembly are asTurnerfollows:Direct materialDirect laborVariable manufacturing overhead$1279The company is now using only 75% of its normal capacity; it could fully use its normal capacity by processing the assembly further and selling it for $63 per unit. If the company does this, materialand labor costs will each increase by $2 per unit and variable overhead will go up by $1 per unit. Fixed costs will increase from the current level of $125,000 to $163,000.Prepare an analysis showi whether Turner should process the assemblies further.Use a negative sign with answer to only indicate a loss from processing assemblies further; otherwise do not use negative signs with your answers.Sell of Process Further Differential Analysis$Differential revenueDifferential costsDirect materialDirect laborVariable overheadFixed costsAdditional income (loss) from processing further $264,000(66,000) *(66,000) *(33,000) *(38,000) *61,000

Introduction:- The given problem is about Turner Manufacturing Company which produces partially…

Answered: Sell or Process Further Manufacturing…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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