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denis-greek [22]
3 years ago
6

Assume that Cane normally produces and sells 62,000 Betas and 82,000 Alphas per year. If Cane discontinues the Beta product line

, its sales representatives could increase sales of Alpha by 17,000 units. What is the financial advantage (disadvantage) of discontinuing the Beta product line
Business
1 answer:
Talja [164]3 years ago
3 0

Answer:

Please find the complete question in the attachment.

Explanation:

\beta the margin of contribution unit= 130-25-22-17-14 \ \ \ \ \ \  \ \ \ \ \ \ \ \ \ \ \ \ \ =52

\alpha Margin Contribution Unit = 90-10-21-7-10\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ = 42

8

Contribution losses =62000\times 42 \ \ \ \ \ \ \ \ \ \ \ \ = -2604000

Fixed cost avoidable =102000\times 20 \ \ \  \ \ \ \ \ \ \ \ \ \ \ \ \ \ = 2040000

The margin of Alpha contributions =17000\times 52 \  \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ =884000

Fiscal benefits (disadvantage)= 320000

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solution

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