Sell or Process Further Bear Lake Boat Company manufactures sailboat hulls at a cost of $5,200 per unit. The hulls are sold to boat yards for $6,000. The company is evaluating the desirability of adding masts, sails, and rigging to the hulls prior to sale at an additional cost of $1,500. The completed sailboats could then be sold for $7,000 each.

Determine whether the company should sell sailboat hulls or process them further into complete sailboats. Assume sales volume will not be affected.
Calculate the net advantage (disadvantage) of processing the boat hulls into sail boats. Use a negative sign with your answer, if appropriate.

Exercise 8-6 goods in transit [lo8-2] the kwok company's inventory balance on december 31, 2016, was $190,000 (based on a 12/31/16 physical count) before considering the following transactions: 1. goods shipped to kwok f.o.b. destination on december 20, 2016, were received on january 4, 2017. the invoice cost was $35,000. 2. goods shipped to kwok f.o.b. shipping point on december 28, 2016, were received on january 5, 2017. the invoice cost was $22,000. 3. goods shipped from kwok to a customer f.o.b. destination on december 27, 2016, were received by the customer on january 3, 2017. the sales price was $45,000 and the merchandise cost $27,000. 4. goods shipped from kwok to a customer f.o.b. destination on december 26, 2016, were received by the customer on december 30, 2016. the sales price was $25,000 and the merchandise cost $18,000. 5. goods shipped from kwok to a customer f.o.b. shipping point on december 28, 2016, were received by the customer on january 4, 2017. the sales price was $30,000 and the merchandise cost $17,000. required: determine the correct inventory amount to be reported in kwok's 2016 balance sheet.