Park Manufacturing Company has been producing three products: frisbees, volleyballs, and croquet. Now that the plant has been shifted to an assembly-line operation, a fourth product, bocce, has been added. Each product has its own assembly-line operation, producing 25,000 units. Total indirect fixed costs of $200,000 are divided proportionately, based on the space allocated to each assembly line. Other pertinent information is given below.

Required:
1. Prepare a schedule that shows net income for each product line.
2. Would total company income increase if the bocce balls were dropped? Why or why not?
3. Interpretive Question: If you could double the production of either the frisbees, the volleyballs, or the croquet sets in place of having bocce balls, which would you choose?Why?

Transcribed Image Text:

Volleyball Croquet Bocce Frisbee Selling price per unit Variable cost per unit. Number of square feet. $8.00 $5.00 $12.00 $9.15 1,400 $24.00 $21.75 1,100 $12.75 1,600 900