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Pine Street Inc. makes and sells unfinished bookcases. Because it has unused capacity, Pine Street is considering finishing the bookcases. No increase in fixed production costs is expected to occur if the bookcases are finished. Unit costs of the bookcases are presented below.
Selling price of unfinished bookcases $ 62.00
Selling price of finished bookcases 70.00
Production costs per unfinished bookcase:
Variable 36.00
Fixed 10.00
Variable finishing costs per bookcase 6.00
Question 1: Should Pine Street sell finished or unfinished bookcases.
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