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Duvel Ltd. currently manufactures three products: X, Y, and Z. Results from the previous fiscal year for these products are presented below: Item Product
Duvel Ltd. currently manufactures three products: X, Y, and Z. Results from the previous fiscal year for these products are presented below: Item Product X Product Y Product Z Sales - units 7,225 5,250 9,775 Sales price per unit $78 $45 $60 Variable cost per $57 $35 $33 unit Fixed costs $99,000 $52,250 $155,000 Duvel is considering eliminating Product Y in order to focus their efforts on its other two products. The discontinuation of Product Y is expected to cause the following changes: A 20% increase in the production and sales of Product X A 5% decrease in the production and sales of Product Z 65% of the fixed costs of Product Y will be eliminated What is the incremental change in income of the company if Product Y is discontinued?
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