Data Point, Inc. has decided to discontinue manufacturing its Quantum model personal organizer. Currently the company has a number of partially completed personal organizers on hand. The company has spent $110 per unit to manufacture these organizers. To complete each unit, costs of $15 for material and $16 for direct labor will be incurred. In addition, $11 of variable overhead and $32 of allocated fixed overhead (relating primarily to depreciation of plant and equipment) will be added per unit.
If Data Point, Inc completes the organizers, it can sell them for $135 per unit. Another manufacturer is interested in purchasing the partially completed organizers for $105 per unit and converting them into inventory tracking devices.
Determine whether Data Point, Inc. should complete the personal organizers or sell them in their current state.

  • CreatedSeptember 23, 2013
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