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 $70. Production costs are $37 variable and $14 fixed. Mesa Verde is considering staining and sealing the table to sell it for $103. Variable costs to finish each table are expected to be $19, and fixed costs are expected to be $4.

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).)

Do It! Review 21-4 Mesa Verde manufactures unpainted furniture for the do-it-yourself (DIY) market. It currently sells a table for $70. Production costs are $37 variable and $14 fixed. Mesa Verde is considering staining and sealing the table to sell it for $103. Variable costs to finish each table are expected to be $19, and fixed costs are expected to be $4 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 Process Further Net Income Increase (Decrease) Sales per unit Cost per unit Variable Fixed Total Net income per unit $ The tables should b sold processed further

Explanation / Answer

The tables should be "Processed Further"

Sell Unpainted

Process further

Net Income Increase/(Decrease

Sales per unit

70

103

33

Cost per unit

Variable

37

56

-19

Fixed

14

18

-4

Total

51

74

-23

Net Income per unit

19

29

10

Sell Unpainted

Process further

Net Income Increase/(Decrease

Sales per unit

70

103

33

Cost per unit

Variable

37

56

-19

Fixed

14

18

-4

Total

51

74

-23

Net Income per unit

19

29

10

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