SELL OR PROCESS FURTHER Jeffers Inc. has decided to discontinue its Basic model...
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Accounting
SELL OR PROCESS FURTHER
Jeffers Inc. has decided to discontinue its Basic model DVD player. They currently have a number of partially completed units on hand that have incurred $50 of costs per unit. They could complete them incurring the following additional unit costs:
Direct materials $10
Direct labor $20
Variable overhead $ 5
Fixed overhead $30
The fixed costs relate to depreciation on plant assets.
If Jeffers completes the DVD players they can be sold at $100 per unit. However, another company is willing to buy the DVD players as is for $60.
REQUIRED:
What should Jeffers do?
By how much is this preferable to the next best alternative?
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