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Delvig [45]
3 years ago
11

In 2010, the MoreForLess Company had revenues of $2,000,000 while costs were $1,500,000. In 2011, MoreForLess will be introducin

g a new product line that will generate $200,000 in sales revenues and $160,000 in costs. Assuming no changes are expected for the other products, the differential operating profit for 2011 is
Business
1 answer:
Harlamova29_29 [7]3 years ago
4 0

Answer:

Differential profit Profit = $40,000

Explanation:

<em>The differential operating profit is the difference between the operating profit before the introduction of the product and after the introduction of the new product</em>

<em>Profit = Revenue - costs</em>

Profit before the introduction of the new product

= 2,000,000 - 1,500,000 = 500,000

Profit after the introduction of the new product

New revenue =  (2,000,000 + 200,000) = 2,200,000

Cumulative cost = 1,500,000 + 160,000 =  1,660,000

Profit = 2,200,000 - 1,660,000 = 540000

Differential profit Profit =  540,000 - 500,000= $40,000

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A photocopier cost 96000 when new and has accumulated depreciation of 95000. if the business discards this plant asset, the result is  $1,000.

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A photocopier (also known as a copier or copier, formerly Xerox machine, a generic trademark) is a machine that copies documents and other visual images onto paper or plastic film quickly and inexpensively.

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