Question

Electronic Media has decided to discontinue manufacturing their personal tablets. This decision results in tablets that are not completed. The company can sell the tablets as is for $107 per unit or they can complete the production and sell them for $130 per unit. The following cost data is available:

Costs incurred to date:
Materials	27
Labor	31
Variable overhead	20
Fixed overhead	32
	110
Additional Costs to complete (per unit)
Materials	14
Labor	16
Variable overhead	10
	40

Should Electronic Media sell the units as is or continue processing them? Why? Show your work.

Answer 1

	Before further proccess	After further proccess
Selling price	$                                          107	$                                      130
Less: Costs	$                                          110	$110+$40 = $150
Profit / (loss)	$                                            (3)	$                                      (20)

further processing will result an additional loss of $17 per unit