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Brighton Company's results of operations for its most recent year are shown below. Brighton makes two products, CJ11 and PX22. Variable selling expenses for CJ11
Brighton Company's results of operations for its most recent year are shown below. Brighton makes two products, CJ11 and PX22. Variable selling expenses for CJ11 are $3 per unit and $16 per unit for PX22. Cost of goods sold includes $3 per unit of fixed manufacturing costs for CJ11 and $16 per unit for PX22 (remaining selling amounts are fixed). Units Sales revenue Less: Cost of goods sold Gross Margin Less: Selling expenses Operating income (loss) CJ11 8,000 $192,000 144,000 $ 48,000 40,000 $ 8,000 PX22 2,960 $592,000 384,800 $207,200 107,200 $100,000 If Brighton eliminates CJ11 and uses the available capacity to produce and sell an additional 1,200 units of PX22, what would be the impact on operating income? Multiple Choice $76,000 Increase $48.000 decrease $36.000 Increase O O $84.000 Increase None of the answers is correct. O
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