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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
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