HiTech manufactures two products: Regular and Super. The results of operations for 20x1 follow. @gm mg m Units 1_.0_ 3E .m Sales $240,000 $740,000 $980,000
HiTech manufactures two products: Regular and Super. The results of operations for 20x1 follow. @gm mg m Units 1_.0_ 3E .m Sales $240,000 $740,000 $980,000 Less: Cost of goods sold 180,000 481,000 661,000 Gross margin $ 60,000 $259,000 $319,000 Less: Selling expenses 60,000 134,000 194,000 Operating income $ 0 _ $125,000 _ $125,000 Fixed manufacturing costs included in cost of goods sold amount to $3 per unit for Regular and $20 per unit for Super. Variable selling expenses are $4 per unit for Regular and $20 per unit for Super; remaining selling amounts are fixed. If HiTech eliminates Regular and uses the available capacity to produce and sell an additional 1,500 units of Super, what would be the impact on operating income? 0 $28,000 increase 0 $45,000 increase 0 $55,000 increase 0 $85,000 increase
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