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Bailey Company manufactures and sells a number of products, including Product R. Results from last year from the sale of Product R are given below:
Bailey Company manufactures and sells a number of products, including Product R. Results from last year from the sale of Product R are given below: Sales revenue ............................. $750,000 Variable production costs ................. 450,000 Sales commissions ......................... 110,000 Salary of product manager ................. ? Advertising expense ....................... 80,000 Allocated general overhead ................ ? Net operating loss ........................ <55,000> Bailey Company is considering eliminating the production and sale of Product R. The company has determined that if Product R is discontinued, the contribution margin of its other products will increase by $40,000. Based on a cost analysis, the management of Bailey Company has determined that if Product R is discontinued the company's net income will decrease by $25,000. Calculate the amount of allocated general overhead cost for Product R incurred last year.
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