Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Keith Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by changes in other product

image text in transcribed

Keith Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by changes in other product lines. 30% of the fixed costs are direct, and the other 70% are allocated. Results of June follow: Sour Cream Ice Cream Yogurt Butter Total Units sold 2,000 500 400 200 3,100 Revenue $ 10,000 $ 20,000 $ 10,000 $ 20,000 $ 60,000 Variable departmental costs 6,000 13,000 4,200 4,800 28,000 Fixed costs 5,000 2,000 3,000 7,000 17,000 Net income (loss) $ (1,000) $ 5,000 $ 2,800 $ 8,200 $ 15,000 Prepare an incremental analysis of the effect of dropping the sour cream product line. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses eg. (45).) Incremental decrease in profits if dropped $ -10000 Incremental variable cost savings 6000 Incremental fixed cost savings 1500 Incremental decrease in profits if dropped $ -2500 Save for Later Last saved 16 minutes ago. Attempts: 0 of 1 used Submit Answer Saved work will be auto-submitted on the due date. Auto- submission can take up to 10 minutes

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

Cost Accounting A Managerial Emphasis

Authors: Charles T. Horngren, George Foster, Srikant M. Datar, Howard D. Teall

4th Canadian Edition

0131971905, 978-0131971905

More Books

Students also viewed these Accounting questions