Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Duvel Ltd. currently manufactures three products: X, Y, and Z. Results from the previous fiscal year for these products are presented below: Product X Product

Duvel Ltd. currently manufactures three products: X, Y, and Z. Results from the previous fiscal year for these products are presented below:

Product X

Product Y

Product Z

Sales - units

7010

5388

9573

Sales price per unit

$80

$41

$62

Variable cost per unit

$60

$34

$30

Fixed costs

$92780

$57594

$151562

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 18% increase in the production and sales of Product X

A 6% 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?

Select one:

a. $6576

b. $-30860

c. $-1031

d. $44292

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Tax Accounting

Authors: Greg Shields

1st Edition

163716128X, 978-1637161289

More Books

Students also viewed these Accounting questions

Question

7.1 Define selection and discuss its strategic importance.

Answered: 1 week ago