Do It! Review 20-4 Mesa Verde manufactures unpainted furniture for the do-it-you

Question

Do It! Review 20-4 Mesa Verde manufactures unpainted furniture for the do-it-yourself (DIY) market. It currently sells a table for $74. Production costs are $44 variable and $15 fixed. Mesa Verde is considering staining and sealing the table to sell it for $110. Variable costs to finish each table are expected to be $18, and fixed costs are expected to be $3 Prepare an analysis showing whether Mesa Verde should process the tables further. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Sell Unpainted proces Increase Net Income Increase (Decrease) Further Sales per unit Cost per unit Variable Fixed Total Net income per unit $ The tables should be Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

The table should be process further.

Sell
Unpainted Process
Further Net Income
Increase (Decrease) Sales per unit $74 $110 $36 Cost per unit Variable $44 $62 $18 Fixed 15 18 3 Total $59 $80 $21 Net Income per unit $15 $30 $15

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