Varto Company has 7,000 units of its sole product in inventory that it produced last year at a cost of $22each. This year’s model is superior to last year’s, and the 7,000 units cannot be sold at last year’s regularselling price of $35 each. Varto has two alternatives for these items: (1) They can be sold to a wholesalerfor $8 each or (2) they can be processed further at a cost of $125,000 and then sold for $25 each. ShouldVarto sell the products as is or process further and then sell them?
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