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Dvinal [7]
3 years ago
7

L Corporation produces and sells 15,300 units of Product X each month. The selling price of Product X is $23 per unit, and varia

ble expenses are $17 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $74,000 of the $103,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the annual financial advantage (disadvantage) for the company of eliminating this product should be:
Business
1 answer:
Arlecino [84]3 years ago
5 0

Answer:

<em><u>It would generate a financial disadvantage for 62,800</u></em>

Explanation:

\left[\begin{array}{cccc}-&continued&discontinued&differential\\Sales&351,900&0&-351,900\\Variable&-260,100&0&260,100\\Contribution&91,800&0&-91,800\\Fixed&-103,000&-74,000&29,000\\total&-11,200&-74,000&-62,800\\\end{array}\right]

It would generate a financial disadvantage for 62,800

Because the product, while is having a loss, their contribution cover is enought to cover at least the avoidable fixed cost.

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The question is incomplete; assuming that the market price is $5.

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3 0
3 years ago
Jacoby Company received an offer from an exporter for 25,400 units of product at $18 per unit. The acceptance of the offer will
OlgaM077 [116]

Answer:

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I Incremental Revenue from the special order  

2. incremental variable cost

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6 0
3 years ago
Harry has just inherited $300,000. Harry has decided to quit his job and go to school full time for the next five years by livin
never [62]

Answer:

$ 75131

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Amount inherited = $ 300000

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