Varto Company has 8,400 units of its product in inventory that it produced last year at a cost of $153,000. This year’s model is better than last year’s, and the 8,400 units cannot be sold at last year’s normal selling price of $37 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $92,400 or (2) they can be processed further at an additional cost of $140,900 and then sold for $226,800.
A) Prepare a sell as is or process further analysis of income effects.
B) Should Varto sell the products as is or process further and then sell them?
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