Question
Cobe Company has manufactured 295 partially finished cabinets at a cost of $73,750. These can be sold as is for $88,500. Instead, the cabinets can be stained and fitted with hardware to make finished cabinets. Further processing costs would be $17,700, and the finished cabinets could be sold for $118,000. (a) Prepare a sell as is or process further analysis of income effects. (b) Should the cabinets be sold as is or processed further and then sold? Answer is complete but not entirely correct. Process (a) Sell or Process Analysis Sell As Is Further Revenue $ 88,500 Costs -73750 Income $ 14,750 Incremental income (loss) to process further $ (b) The company should: Sell as is $ 118,000 (91,450) 26,550 11,800
Answer
| Sell of process analysi | Sell as is | Process further |
| Revenue | 88500 | 118000 |
| Costs | 0 | -17700 |
| Income | 88500 | 100300 |
| Incremental income (loss) to process further | 100300-88500 = 11800 | |
| b) The company should | Process further |
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