Greenview currently manufactures one model of a plain, unfinished oak bookcase. The company is considering changing this product by adding a long-wearing finish and more appealing trim. A summary of the expected costs and revenues for Greenview’s two options follows:

Required:
1. Compute the difference in profit between selling the bookcases finished or unfinished.
2. Should Greenview finish the bookcases?
3. Suppose that choosing to process the bookcases further would reduce the number of units sold to 6,500. Repeat requirements 1 and 2 under this newscenario.

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Unfinished Bookcase Finished Bookcase Estimated demand Estimated sales price Estimated cost per unit 8,000 units 8,000 units $80.00 $50.00 $15.00 20.00 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $11.00 8.00 0.50 5.00 $24.50 1.50 5.00 Unit manufacturing cost $41.50 Additional implementation cost $75,000