Cobe Company has manufactured 260 partially finished cabinets at a cost of $65,000. These can be sold as is for $78,000. Instead, the cabinets can be stained and fitted with hardware to make finished cabinets. Further processing costs would be $15,600, and the finished cabinets could be sold for $104,000.

 Cobe Company has manufactured 260 partially finished cabinets at a cost of $65,000. These can be sold as is for $78,000. Instead, the cabinets can be stained and fitted with hardware to make finished cabinets. Further processing costs would be $15,600, and the finished cabinets could be sold for $104,000.

(a) Prepare a sell as is or process further analysis of income effects.
(b) Should the cabinets be sold as is or processed further and then sold?

 

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