Question
Lusk Company produces and sells 15,200 units of Product X each month. The selling price of Product X is $22 per unit, and variable expenses
Lusk Company produces and sells 15,200 units of Product X each month. The selling price of Product X is $22 per unit, and variable expenses are $16 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $73,000 of the $102,000 in fixed expenses charged to Product X would continue even if the product was discontinued. These data indicate that if Product X is discontinued, the company's overall net operating income would: |
decrease by $62,200 per month
increase by $10,800 per month
increase by $39,800 per month
decrease by $39,800 per month
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