Question
Please provide answer for both. Step by step explanation not needed i just want to check my work. I will feedback and like if correct.
Please provide answer for both. Step by step explanation not needed i just want to check my work. I will feedback and like if correct.
BT&T Corporation manufactures telephones. Recently, the company produced a batch of 610 defective telephones at a cost of $9,100. BT&T can sell these telephones as scrap for $10 each. It can also rework the entire batch at a cost of $6,600, after which the telephones could be sold for $21 per unit.
If BT&T reworks the defective telephones, by how much will its operating income change?
Question 1 options:
Decrease by $6,210 | |
Decrease by $2,890 | |
Increase by $6,210 | |
Increase by $6,710 |
Creative Star Corporation produces three lines of desks from wood: Classic, Royal, and Standard. Cost and revenue data pertaining to each product are shown below:
Classic | Royal | Standard | |
---|---|---|---|
Selling price | $ 185 | $ 255 | $ 105 |
Total variable costs | $ 80 | $ 170 | $ 70 |
Classic desks require five square yards of wood, Royal requires ten square yards, and Standard requires three square yards. High demand for each product line far exceeds the company's production capacity.
If Creative Star Corporation has only 300,000 square yards of wood available, what is the highest total amount of fixed cost the company can incur and still break-even?
Question 2 options:
$10,500,000 | |
$6,300,000 | |
$3,500,000 | |
$2,550,000 |
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