"Pine Street Inc. makes unfinished bookcases that it sells for $57.10. Production costs are $37.94 variable and $10.50 fixed. Because it has unused capacity, Pine Street is considering finishing the bookcases and selling them for $72.02. Variable finishing costs are expected to be $7.14 per unit with no increase in fixed costs. Prepare an analysis on a per unit basis showing whether Pine Street should sell unfinished or finished bookcases. (Round answers to 2 decimal places, e. g. 15.25. Enter negative amounts using either a negative sign preceding the number e. g. -45 or parentheses e. g. (45).)"

Answer and Explanation:

The Preparation of analysis on a per unit basis showing whether Pine Street should sell unfinished or finished bookcases is prepared below:-

Particulars          Sell unfinished         Process further     Net income

                                                                                                      (loss)

Sales per unit      $57.10                        $72.02                     $14.92

Cost per unit

Variable                $37.94                    $45.08                        -$7.14  

                                                         ($37.94 + 7.14)

Fixed                   $10.5                         $10.5

Total                      $48.4                       $55.58                      $7.78

Net income per

unit                      $8.66                          $16.44                   $7.78

From the above calculation The bookcases to be sold and process further.

correct, but each time you dont pay the price of the penalty can increase.

answerthe above statement is (true);