Applesoft produces tablets, laptops and televisions. Applesoft typically sells 1,000 tablets a year. The tablet information is as follows: Selling price per unit $60 Direct material cost per unit $30 Direct labor cost per unit $15 Total allocated overhead (1/4 avoidable if eliminate tablets) $80,000 One fourth of the allocated overhead would be avoidable if the tablets were eliminated. How much would Operating Income change by if Applesoft were to eliminate the tablets? Be sure to include "-" in front of your amount if net income will decrease
Applesoft produces tablets, laptops and televisions. Applesoft typically sells 1,000 tablets a year. The tablet information is as follows: Selling price per unit $60 Direct material cost per unit $30 Direct labor cost per unit $15 Total allocated overhead (1/4 avoidable if eliminate tablets) $80,000 One fourth of the allocated overhead would be avoidable if the tablets were eliminated. How much would Operating Income change by if Applesoft were to eliminate the tablets? Be sure to include "-" in front of your amount if net income will decrease
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 2CE
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