Varto Company has 13,400 units of its product in inventory that it produced last year at a cost of $151,000. This year’s

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Varto Company has 13,400 units of its product in inventory thatit produced last year at a cost of $151,000. This year’s model isbetter than last year’s, and the 13,400 units cannot be sold atlast year’s normal selling price of $53 each. Varto has twoalternatives for these units: (1) They can be sold as is to awholesaler for $187,600 or (2) they can be processed further at anadditional cost of $182,000 and then sold for $361,800.(a) Prepare a sell as is or processfurther analysis of income effects.(b) Should Varto sell the products as is orprocess further and then sell them?

Varto Company Has 13 400 Units Of Its Product In Inventory That It Produced Last Year At A Cost Of 151 000 This Year S 1 (28.88 KiB) Viewed 10 times

Exercise 23-5 (Algo) Sell or process LO P2 Varto Company has 13,400 units of its product in inventory that it produced last year at a cost of $151,000. This year's model is better than last year's, and the 13,400 units cannot be sold at last year's normal selling price of $53 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $187,600 or (2) they can be processed further at an additional cost of $182,000 and then sold for $361,800. (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 187,600 $ 0 187,600 $ Process Further 361,800 361,800 0