Solution-Prepare analysis showing Jensen should process the

Prepare analysis showing Jensen should process the further

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Reference no: EM133024670

Problem - Sell or Process Further - Jensen Manufacturing Company makes a partially completed assembly unit that it sells for $39 per unit. Normally, 45,000 units are sold each year. Variable unit cost data on the assembly are as follows:

Direct material	$10
Direct labor	8
Variable manufacturing overhead	4

The company is now using only 70% of its normal capacity; it could fully use in; normal capacity by processing the assembly further and selling it for $46 per unit. If the company does this, material and labor costs will each increase by $2 per unit and variable overhead will go up by $1 per unit. Fixed costs will increase from the current level of $160,000 to $235,000.

Required - Prepare an analysis showing whether Jensen should process the assemblies further.

Reference no: EM133024670

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Prepare analysis showing Jensen should process the further

Reference no: EM133024670

Reference no: EM133024670

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