Question
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
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