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Omar Industries manufactures two products: Regular and Super. The results of operations for 20x1 follow. Units Sales revenue Less: Cost of goods sold Gross Margin
Omar Industries manufactures two products: Regular and Super. The results of operations for 20x1 follow. Units Sales revenue Less: Cost of goods sold Gross Margin Less: Selling expenses Operating income (loss) Regular 11,000 Super 3,000 Total $385,000 $690,000 316,000 420,000 14,000 $1,075,000 736,000 $ 69,000 $270,000 $ 339,000 69,000 0 151,000 220,000 $119,000 $ 119,000 Fixed manufacturing costs included in cost of goods sold amount to $2 per unit for Regular and $20 per unit for Super. Variable selling expenses are $3 per unit for Regular and $20 per unit for Super; remaining selling amounts are fixed. If Omar Industries eliminates Regular and uses the available capacity to produce and sell an additional 1,900 units of Super, what would be the impact on operating income? Multiple Choice $89,500 increase $102,000 increase $113,000 increase $151,000 increase None of the answers is correct
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