Mesa Verde manufactures unpainted furniture for the do-it-yourself (DIY) market.

Question

Mesa Verde manufactures unpainted furniture for the do-it-yourself (DIY) market. It currently sells a table for $74. Production costs are $45 variable and $14 fixed Mesa Verde is considering staining and sealing the table to sell it for $102. Variable costs to finish each table are expected to be $17, and fixed costs are expected to be $2 Prepare an analysis showing whether Mesa Verde should process the tables further. (Enter negative amounts using ether a negative sign preceding the number e.g.-45 or parentheses e.g. (45). Sell Unpainted ProcesS Further Net Income Increase (Decrease) Sales per unit Cost per unit Variable Fixed Total Net income per unit The tables should be

Explanation / Answer

Sell Process Further Net Income Increase (Decrease) Sales per unit 74 102 28 Cost per unit Variable 45 62 -17 Fixed 14 16 -2 Total 59 78 -19 Net income per unit 15 24 9 The tables should be processed further

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