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WARRIOR [948]
3 years ago
8

Seidman Company manufactures and sells 20,000 units of product X per month. Each unit of product X sells for $17 and has a contr

ibution margin of $8. If product X is discontinued, $45,000 in fixed monthly overhead costs would be eliminated and there would be no effect on the sales volume of Seidman Company's other products. If product X is discontinued, Seidman Company's monthly income before taxes should:
Business
1 answer:
True [87]3 years ago
4 0

Answer:

Effect on income= $115,000 decrease

Explanation:

Giving the following information:

Fixed costs= $45,000

Number of units= 20,000

Unitary contribution margin= $8

<u>To calculate the effect on income, we need to use the following formula:</u>

Effect on income=  decrease in fixed costs - decrease in contribution margin

Effect on income= 45,000 - 20,000*8

Effect on income= $115,000 decrease

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Answer:

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work out a plan with its financial intermediaries

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