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mel-nik [20]
3 years ago
11

State Road Fabricators Inc. is considering eliminating Model A02777 because of losses over the past quarter. The past three mont

hs of information for Model A02777 are summarized​ below: Sales​ (1,100 units) ​$370,000 Manufacturing​ costs: Direct materials ​160,000 Direct labor​ ($15 per​ hour) ​80,000 Overhead ​150,000 Operating loss ​($20,000) Overhead costs are​ 75% variable and the remaining​ 25% is depreciation of special equipment for model A02777 that has no resale value. If Model A02777 is dropped from the product​ line, operating income will​ ________.
A. decrease by​ $20,000
B. increase by​ $37,500
C. decrease by​ $17,500
D. increase by​ $20,000
Business
1 answer:
ICE Princess25 [194]3 years ago
6 0

Answer:

Option (C) is correct.

Explanation:

Manufacturing costs:

= Direct Materials + Direct Labor + Variable overhead

= $160,000 + $80,000 + (150,000 × 75%)

= $160,000 + $80,000 + $112,500

= $352,500

Operating income:

= Sales​ (1,100 units) - Manufacturing costs

= $370,000 - $352,500

= $17,500

Therefore, if Model A02777 is dropped from the product​ line, operating income will​ decrease by​ $17,500.

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Ahrens should accept Wholesaler B offers to buy 15,500 units at $42 each

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The sale of goods or merchandise to retailers, industrial, commercial, institutional, or other professional business users, or other wholesalers and related subordinated services, is known as wholesaling or distributing.

In the supply chain, a wholesaler serves as an intermediary or middleman. The most common type of wholesaler is a company that buys finished products from manufacturers and distributes them to retailers, who then sell smaller quantities of the product to end users.

To summarize the key distinctions, retailers sell goods directly to end users in small quantities. Wholesalers, on the other hand, sell goods to other store owners and retail industry professionals, who then sell the goods to the end user.

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8 0
2 years ago
Accurate Tax Returns budgets two direct labor hours for every tax return that it​ prepares, at a standard cost of​ $34 an hour.
Artemon [7]

Answer:

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Explanation:

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