Question
Cranes Woodworking Company is considering the addition of a new line of quilt frames to its current product lines. If the new quilt frames are
Cranes Woodworking Company is considering the addition of a new line of quilt frames to its current product lines. If the new quilt frames are added to Cranes production, contribution margin of the other products is expected to drop by $3,300. Crane has summarized the projected revenue and cost for the new line of frames.
Annual sales | 330 units | |
Selling price per unit | $380 | |
Variable costs per unit | ||
Manufacturing | 310 | |
Selling | 18 | |
Avoidable fixed costs per year | ||
Production | 4,300 | |
Selling | 5,300 | |
Allocated common fixed costs per year | 2,900 |
If Crane adds the new quilt frame to its line of products, what will be the increase in operating income? Increase in operating income $enter a dollar amount
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