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options are Incremental Fixed cost savings Incremental revenue Incremental decrease in profits if dropped Incremental direct materials Incremental variable cost savings Incremental direct labor Additional
options are
Incremental Fixed cost savings
Incremental revenue
Incremental decrease in profits if dropped
Incremental direct materials
Incremental variable cost savings
Incremental direct labor
Additional Brief Exercise 176 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: Units sold Revenue Variable departmental costs Fixed costs Net income (loss) Sour Cream 2,000 $10,000 6,000 5,000 $(1,000) Ice Cream 500 $ 20,000 13,000 2,000 $ 5,000 Yogurt 400 $10,000 4,200 3,000 $ 2,800 Butter 200 $ 20,000 4,800 7,000 $ 8,200 Total 3,100 $60,000 28,000 17,000 $ 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 e.g. (45).) v
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