Varto Company has 9,400 units of its product in inventory that it produced last year at a cost of $153,000. This year's model is better than last year's, and the 9,400 units cannot be sold at last year's normal selling price of $52 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $84,600 or (2) they can be processed further at an additional cost of $241,700 and then sold for $319,600. (a) Prepare a sell as is or process further analysis of income effects. (b) Should Varto sell the products as is or process further and then sell them? (a) Sell or Process Analysis Revenue Costs Income Incremental income (loss) to sell as is (b) The company should: Sell As Is Process Further

Varto Company has 9,400 units of its product in inventory that it produced last year at a cost of $153,000. This year's model is better than last year's, and the 9,400 units cannot be sold at last year's normal selling price of $52 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $84,600 or (2) they can be processed further at an additional cost of $241,700 and then sold for $319,600. (a) Prepare a sell as is or process further analysis of income effects. (b) Should Varto sell the products as is or process further and then sell them? (a) Sell or Process Analysis Revenue Costs Income Incremental income (loss) to sell as is (b) The company should: Sell As Is Process Further

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 2MC: Denali Company manufactures household products such as windows, light fixtures, ladders, and work...

See similar textbooks

Similar questions

Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the annual ordering cost. 2. Compute the annual carrying cost. 3. Compute the cost of Ottiss current inventory policy. Is this the minimum cost? Why or why not?
Varto Company has 10,600 units of its product in inventory that it produced last year at a cost of $150,000. This year's model is better than last year's, and the 10,600 units cannot be sold at last year's normal selling price of $46 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $116,600 or (2) they can be processed further at an additional cost of $208,200 and then sold for $318,000. (a) Prepare a sell as is or process further analysis of income effects. (b) Should Varto sell the products as is or process further and then sell them? (a) Sell or Process Analysis Revenue Costs Income Incremental income (loss) to sell as is (b) The company should: Sell As Is Process Further $ 0 $ 0
Varto Company has 10,400 units of its sole product in inventory that it produced last year at a cost of $35 each. This year's model is superior to last year's, and the 10,400 units cannot be sold at last year's regular selling price of $44 each. Varto has two alternatives for these items: (1) they can be sold to a wholesaler for $10 each or (2) they can be processed further at a cost of $245,800 and then sold for $33 each. Should Varto sell the products as is or process further and then sell them? INCREMENTAL REVENUE AND COST OF ADDITIONAL PROCESSING Revenue if processed further Revenue if sold as is Incremental revenue Incremental net income(Loss) The company should.
Schrute Company has 7,200 units of its sole product in inventory that it produced last year at a cost of $30 each. This year's model is superior to last year's, and the 7,200 units cannot be sold at last year's regular selling price of $40 each. Schrute has two alternatives for these items: (1) they can be sold to a wholesaler for $10 each or (2) they can be processed further at a cost of $130,100 and then sold for $27 each. Should Schrute sell the products as is or process further and then sell them? INCREMENTAL REVENUE AND COST OF ADDITIONAL PROCESSING Revenue if processed further Revenue if sold as is Incremental revenue Incremental net income(Loss) The company should:
Varto Company has 7,000 units of its sole product in inventory that it produced last year at a cost of $22 each. This year’s model is superior to last year’s, and the 7,000 units cannot be sold at last year’s regular selling price of $35 each. Varto has two alternatives for these items: (1) They can be sold to a wholesaler for $8 each or (2) they can be processed further at a cost of $125,000 and then sold for $25 each. Should Varto sell the products as is or process further and then sell them?
Varto Company has 7,000 units of its product in inventory that it produced last year at a cost of $154,000 This year's model is better than last year's, and the 7,000 units cannot be sold at last year's normal selling price of 535 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $5 6,000 or (2) they can be processed further at an additional cost of $125,000 and then sold for $175,000. (a) Prepare a sell as is or process further analysis of income effects. (b) Should Varto sell the products as is or process further and then sell them? \table[(a) Sell or Process Analysis, Sell As is, Process Further). (Revenue..]. [Costs, Income..].[..],[Incremental income (loss) to sell as is..].[..], [(b) The company should...]]
sa
Please help me
Varto Company has 12,400 units of its sole product in inventory that it produced last year at a cost of $23 each. This year’s model is superior to last year’s, and the 12,400 units cannot be sold at last year’s regular selling price of $51 each. Varto has two alternatives for these items: (1) they can be sold to a wholesaler for $13 each, or (2) they can be reworked at a cost of $254,100 and then sold for $33 each. Prepare an analysis to determine whether Varto should sell the products as is or rework them and then sell them. INCREMENTAL REVENUE AND COST OF ADDITIONAL PROCESSING Revenue if processed further Revenue if sold as isIncremental revenue Add: Incremental cost of processingIncremental net income(Loss) The company should:
Vishnu
One of the products that Justine Corporation sells is “Extra Soft” floor mats. Justine’s ordering costs related to the mat is P12.50 per order. The cost of carrying one mat for one year is P16.00. Justine sells 40, 000 of these mats evenly throughout the year. 1. If, instead of following the EOQ, the company decided to place an order of 200 units per order, how much will be the total inventory cost?
Ekor bakery sells doughnut. The annual demand is 10,000 per year. The ordering cost is $21, and holding cost is $3. If the demand exceeds the inventory, Ekor has two types of costs associated with the backorder. The loss of goodwill is $O.1 per unit short, and a "bookkeeping" cost of $0.3 per unit short per year. Calculate: economic order quantity, maximum acceptable inventory, cycle time, and minimal total annual average cost. Suppose the doughnuts are sold in packages of 150 units each. How many packages should sell? (Hint: Sensitivity of EOQ).