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Compute the incremental profit

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Question - Sol Ltd. manufactures unfinished chairs that sell for $47.39 each and cost $20.00 to make. The company has been considering finishing the chairs, which it could then sell the chairs for $63.36 each. However, it has been determined that only 7495 finished chairs could be sold; the other 3329 chairs would continue to be sold unfinished.

Costs per chair associated with processing further are:

Direct materials $4.35

Direct labour 14.75

Variable overhead 3.23

If the company decides to process further, compute the incremental profit (loss)?

a. $-47668

b. $-23459

c. $102232

d. $307520

Reference no: EM132728036

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