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Diversified Products, Inc, has recently acquired a small publishing company that Diversified Products intends to operate as one of its investment centers. The newly acquired

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Diversified Products, Inc, has recently acquired a small publishing company that Diversified Products intends to operate as one of its investment centers. The newly acquired company has three books that it offers for sale a cookbook, a travel guide, and a handy speller Each book sells for $11.1. The publishing company's most recent monthly income statement is given below Product Line TravelHandy Company Cookbook Guide Speller Total Sales Expenses $314,000 S 94 200 157 000 62800 Printing costs Advertising General sales Salaries Equipment depreciation Sales commissions General administration Warehouse rent Depreciation office facilities 98,500 28,900 59,200 10.400 34,000 15,400 15,700 2,900 21,000 6,30010,500 4,200 30,800 19.30073004.200 6.300 2,100 2,100 2,100 34,540 10,36217270 6,908 36,600 12.200 12,200 12.200 13200 3.96 6,600 2640 1200 1.200 278.540 99 722132 07046,748 $ 35,460 $ (5,522) $ 24.930 $ 16,052 3,600 1200 Total expenses Net operating income (loss) The following additional information is available about the company a Only printing costs and sales commissions are variable, all other costs are fixed. The printing costs (which include materials, labor, and variable in the statement above. Sales commissions are 11% of sales for any product overhead) are traceable to the three product lines as shown b. The same equipment is used to produce all three books, so the equipment depreciation cost has been allocated equally among the three product lines. An analysis of the company's activities indicates that the quipment is used 35% of the time to produce cookbooks, 45% of the time to produce travel guides, and 20% of the time to produce handy spellers

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