Exercise 25-5 (Algo) Sell or process LO P2 Varto Company has 13,800 units of its product in inventory that it produced l

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Exercise 25 5 Algo Sell Or Process Lo P2 Varto Company Has 13 800 Units Of Its Product In Inventory That It Produced L 1 (67.45 KiB) Viewed 26 times

Exercise 25-5 (Algo) Sell or process LO P2 Varto Company has 13,800 units of its product in inventory that it produced last year at a cost of $157,000. This year's model is better than last year's, and the 13,800 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 $179,400 or (2) they can be processed further at an additional cost of $310,800 and then sold for $483,000. (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? Answer is complete but not entirely correct. (a) Sell or Process Analysis Sell As Is Process Further Revenue $ 179,400 $ Costs (157,000) Income 22,400 $ Incremental income (loss) to sell as is $ (b) The company should: Sell as is 483,000 467,800 15,200 7,200