Managerial Accounting

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Instruments-R-Us: Which Products to Process Further?


Instruments-R-Us Inc. is considering selling some instruments without varnish ("unfinished"). If they sell them unfinished, they save $2.00 per square inch of finishing costs. The sales price with and without varnish and the area requiring varnish, in square inches, is shown below.

Instruments-R-Us Sales Price if Varnished Sales price without Varnish Areas to varnish, in square inches
Violin \$600 \$400 50
Flute \$125 \$80 100
Drum set \$400 \$300 50

The firm is trying to decide which instrument to sell varnished and which to leave unvarnished. Indicate the decision that makes the maximum profit.

The violins should be

, the flutes should be

and the drum sets should be