Question

Brief Exercise 20-5 Pine Street Inc. makes unfinished bookcases that it sells for $58.10. Production costs are $37.49 variable and $10.50 fixed. Because it has unused capacity, Pine Street is considering finishing the bookcases and selling them for $74.91 Variable finishing costs are expected to be $5.79 per unit with no increase in fixed costs. Prepare an analysis on a per unit basis showing whether Pine Street should sell unfinished or finished bookcases. (Round answers to 2 decimal places, e.g. 15.25. Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Sell Unfinished Process Further Net Income Increase (Decrease) Sales price per unit Cost per unit Variable Fixed Total Net income per unit $ The bookcases Click if you would like to Show Work for this question:

Answer 1

	Sell unfinished	Process Further	Net Income Increase (Decrease)
Sales price per unit	58.1	74.91	16.81
Cost per unit
Variable	37.49	43.28	-5.79
Fixed	10.5	10.5	0
Total	47.99	53.78	-5.79
Net income per unit	10.11	21.13	11.02
The bookcases should be processed further