Question
Bertrille Inc. incurs the following costs to produce 20,000 units of a subcomponent: Direct materials $18,200 Direct labor 13,750 Variable overhead 24,000 Fixed overhead 16,300
Bertrille Inc. incurs the following costs to produce 20,000 units of a subcomponent:
Direct materials $18,200
Direct labor 13,750
Variable overhead 24,000
Fixed overhead 16,300
An outside supplier has offered to sell Bertrille the subcomponent for $3.25 a unit. If Bertrille accepts the offer, by how much will net income increase or decrease?
Group of answer choices
$7,250
($7,250)
($9,050)
$9,050
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A company has three product lines, one of which reflects the following results:
Sales$235,000Variable expenses160,000Contribution margin75,000Fixed expenses140,000Net loss($65,000)
If this product line is eliminated, 30% of the fixed expenses can be eliminated and the other 70% will be allocated to other product lines. If management decides to eliminate this product line,
the company's net income will:
Group of answer choices
Increase by $33,000
Increase by $9,000
Decrease by $33,000
Decrease by $9,000
Increase by $42,000
Decrease by $42,000
Hattrick, Inc. makes and sells umbrellas. The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year. The following budget data are available:
Variable Cost Per Unit SoldMonthly Fixed CostSales commissions$0.80$6,000Shipping1.25Advertising0.40Executive salaries40,000Depreciation on office equipment8,000Other0.5528,000
Expenses are paid in the month incurred. If the company has budgeted to sell 7,000 umbrellas in October, how much is the fixed budgeted selling and administrative expenses for October?
Group of answer choices
$84,750
$103,000
$21,000
$63,750
$82,000
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