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mars1129 [50]
3 years ago
6

A study has been conducted to determine if Product A should be dropped. Sales of the product total $400,000 per year; variable e

xpenses total $270,000 per year. Fixed expenses charged to the product total $160,000 per year. The company estimates that $70,000 of these fixed expenses are not avoidable even if the product is dropped. If Product A is dropped, the company's overall net operating income would:
A. decrease by $40,000 per yearB. increase by $40,000 per yearC. decrease by $30,000 per yearD. increase by $30,000 per year
Business
1 answer:
klio [65]3 years ago
3 0

Answer:

Option (A) is correct.

Explanation:

Contribution Margin:

= Total sales of the product - variable expenses

= $400,000 - $270,000

= $130,000

Avoidable fixed cost = Total fixed cost - Unavoidable fixed cost

                                  = $160,000 - $ 70,000

                                  = $90,000

Net Margin :  

= Contribution Margin - Avoidable fixed expense

= $130,000 - $90,000

= $40,000

Hence, if product A is dropped, the company's overall net operating income would decrease by $40,000 per year.

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Explanation:

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3 years ago
Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions Inc. (WFI). After liquidating its re
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Answer:

1. Based on the information given WFI transaction is a taxable transaction which include a recognizes gain of the amount of $40,000 on the transfer of the building as.well as gain of the amount of $60,000 on the transfer of the land.

2. Shauna will recognizes gain of the amountc of $150,000 on the transfer of her stock made to WFI calculated as ($200,000 - $50,000) .

Explanation:

1. Based on the information given WFI transaction is a taxable transaction which include a recognizes gain of the amount of $40,000 on the transfer of the building as.well as gain of the amount of $60,000 on the transfer of the land.

2. Shauna will recognizes gain of the amount of $150,000 on the transfer of her stock made to WFI calculated as ($200,000 - $50,000) .

4 0
3 years ago
The distinctive culture of Wengiston has been losing its predominance among the citizens of the country. This is due to the fact
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The correct answer is B. the convergence hypothesis.

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7 0
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Who would best benefit from counseling?
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Answer:

A person with a debt-to-income ratio of 29% is good. 29% is exactly what you want so this is incorrect. By process of elimination, a person with a debt-to-income ratio of 8% would be your answer. They have the percentage farthest from the one you want.

<u><em>A person with a debt-to-income ratio of 8%</em></u>

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departments       direct expenses       indirect expenses

y                              $1,600                   $13,400 x 55% = $7,370

z                                     $0                   $13,400 x 45% = $6,030

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