Question
Austin Appliances is concerned about the losses associated with the blenders product line and is considering dropping this product line. Allocated fixed costs are assigned
Austin Appliances is concerned about the losses associated with the blenders product line and is considering dropping this product line. Allocated fixed costs are assigned to product lines based on sales. If Austin Appliances eliminates a product line, total allocated fixed costs are assigned to the remaining product lines. All variable costs and direct fixed costs are differential costs. Blenders: sales $75,231, vairable costs $32,858, direct fixed costs $39,198, allocated fixed costs $5,632 Coffee Makers: sales $107,157, vairable costs $55,732, direct fixed costs $32,289, allocated fixed costs $7,570 Toasters: sales $25000, vairable costs $10000, direct fixed costs $7000, allocated fixed costs $1875 Using the differential analysis determine the increase/decrease in profit if Austin Appliances drops the blenders product line versus keeps the product line. Indicate an increase in profit if the blenders are dropped by a positive number. Indicate a decrease in profit if the blenders are dropped by a negative number. Answer to nearest whole dollar without any commas or decimal points eg. 1000 not 1,000.00 Enter a negative number as -10 not (10). Indicate an increase as a positive number and a decrease as a negative number.
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