(Solved):Pine Street Inc. makes unfinished bookcases that it sells for $58.51. Production costs are $37.56…

 

Question

Pine Street Inc. makes unfinished bookcases that it sells for $58.51. Production costs are $37.56 variable and $9.67 fixed. Because it has unused capacity, Pine Street is considering finishing the bookcases and selling them for $70.45. Variable finishing costs are expected to be $8.41 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.

 

EXPERT ANSWER

Unfinished

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