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Marsellus Electronics manufactures two tablet devices, the Cub, and the Eagle. Cub Variable cost per unit $150 Selling price $175 Eagle Variable cost per unit
Marsellus Electronics manufactures two tablet devices, the Cub, and the Eagle. Cub Variable cost per unit $150 Selling price $175 Eagle Variable cost per unit $450 Selling price $575 Currently Marsellus sells 1,000 Cub and 400 Eagle tablets. They allocate fixed costs based on the square footage of plant space The plant is 20.000 square feet and each line occupios 10,000 square feet of the plant. Foced costs are $50,000 If Marsellus drops the Cub line, which of the following is true? c) The Eagle will become more profitable b) Fixed costs will drop by half d) Net income will increase by 25,000 a) Net income will drop by $25,000
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