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Nikolay [14]
4 years ago
10

A study has been conducted to determine if product a should be dropped. sales of the product total $500,000 per year; variable e

xpenses total $340,000 per year. fixed expenses charged to the product total $220,000 per year. the company estimates that $180,000 of these fixed expenses will continue even if the product is dropped. these data indicate that if product a is dropped, the company's overall net operating income would:
Business
1 answer:
Dmitrij [34]4 years ago
4 0
Keep the product:
Sales $500,000Variable Expenses 340,000
---------------------------------------
Contribution Margin 160,000
Fixed Manufacturing 220,000
Net operating income (60,000)

Drop the product:
Sales $0
Variable Expenses 0
----------------------------
Contribution Margin 0
Fixed Manufacturing 180,000
Net operating income (180,000)

Difference of keep and drop the product would be:Sales ($500,000)
Variable Expenses 340,000
-----------------------------------------
Contribution Margin (160,000)
Fixed Manufacturing 40,000
Net operating income (20,000)

Therefore, net operating income would decrease by $20,000 if Product A were dropped.
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Profits are negative in a monopolistically competitive market, the new firms will enter the market until economic profits are zero.

<h3>What is competitive market?</h3>

Competitive market is a market that involves many sellers and producer that are competing with one another.

They compete to provide goods and services

Therefore, profits are negative in a monopolistically competitive market new firms will enter the market until economic profits are zero.

Learn more on competitive market here,

brainly.com/question/25717627

7 0
3 years ago
​Timothy's gross pay for this month is​ $8,950. His gross​ year-to-date pay, prior to this​ month, totaled​ $110,500. What is th
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Answer:

The amount of FICA tax withheld is $532.78

Explanation:

Earnings subject to tax = $117,000

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The amount of FICA tax withheld = Tax rate OASDI + Tax rate Medicare =  $403 + $129.775 = $532.78

The amount of FICA tax withheld is $532.78

5 0
3 years ago
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Answer:

The correct answer is a. True.

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