Accounting Problem
359566 Accounting Problem Accounting Problem The effect on net operating income if Product B90D is discontinued will be this: Lost sales revenues from Product B90D ($720,000) Avoided variable expenses
359566 Accounting Problem Accounting Problem The effect on net operating income if Product B90D is discontinued will be this: Lost sales revenues from Product B90D ($720,000) Avoided variable expenses
Therefore, variable overhead costs would also be avoided in case of no production. However, fixed costs are not relevant for the decision making. Because, fixed costs will be incurred by the company whether the product A is manufactured or not.
What would be the amount of total costs if 25,000 units are produced, assuming that this activity level is within the relevant range?
If the furniture line is discontinued, all sales, variable costs and direct fixed costs would also be eliminated. The sales will be now of Computer equipment and will be higher by 13%. The contribution margin will also be higher by 13%.
expenses can be eliminated and the other 40% will be allocated to other product lines.
The following unit information is also available: Product C should be processed beyond the split-off point because: incremental revenues will exceed incremental costs incremental costs exceed incremental revenue sales
Selling price is constant throughout the entire relevant range. ? Costs are linear over the relevant range. ? Costs can be easily divided into variable and fixed costs. ? In multi-product companies, the sales mix is constant. ?
Division B should not be eliminated. C. If Division A's sales increase $80,000, the over all company net income will be?
If product X is discontinued, $56,000 in fixed monthly overhead costs would be eliminated and there would be no effect on the sales volume of Baker Company's other products.
Costs are linear - The costs can be divided into fixed and variable and that variable costs are fixed per unit and fixed costs are constant in total. c. Sales mix is constant into multi product companies d.