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Cobe Company has manufactured 200 partially finished cabinets at a cost of $50,000. These can be sold as is for $60,000. Instead, the cabinets can be stained and fitted with hardware to make finished cabinets. Further processing costs would be $12,000, and the finished cabinets could be sold for $80,000.
(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?

Respuesta :

Cobe Company has manufactured 200 partially finished cabinets at a cost of $50,000. These can be sold as is for $60,000. Instead, the cabinets can be stained and fitted with hardware to make finished cabinets. Further processing costs would be $12,000, and the finished cabinets could be sold for $80,000.   $8,000

A. Sell or Process Analysis                                  Sell  As Is     Process Further

     Revenue                                                           $ 60,000       $ 80,000

      Costs                                                                   50,000           62000

                                                                               $  18,000       $  18,000

Incremental income (loss) to process further      $                          8,000

B. The company should:                                                   Process further

Incremental revenue is the profit a commercial enterprise gains from an increase in income. it is able to be used to decide the extra revenue generated by using a sure product, investment or direct sale from a advertising campaign when the quantity of income has grown. Incremental sales is frequently compared to the value of a product.

Incremental way a slow increase. it may growth your ad spend and product publicity over a given timeframe given a few positive benchmarks. An incremental sale can be described because the conversion that takes place based on your advertising or promotional activity.  

Learn more about Incremental income here:-https://brainly.com/question/28221148

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