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Question 9 Your company manufactures two product lines of coffee makers. The line of single serve coffee makers reported a loss of $130,200 after selling
Question 9 Your company manufactures two product lines of coffee makers. The line of single serve coffee makers reported a loss of $130,200 after selling 8,400 units. You cannot reduce fixed costs, and you are thinking about dropping the product line. Given the additional financial accounting system information below, what is the difference in the total incremental profit if you decide to drop the line of single serve coffee makers?
Single Serve Coffee Maker Per Unit Total Sales $99.00 $831,600.00 Direct material $23.62 $198,408.00 Direct labor $11.49 $96,516.00 Manufacturing overhead: variable $19.24 $161,616.00 Non-manufacturing overhead: variable $4.02 $33,768.00 Total variable cost $58.37 $490,308.00 Manufacturing overhead: fixed $24.84 $208,656.00 Non-manufacturing overhead: fixed $31.29 $262,836.00 Total fixed cost $56.13 $471,492.00 Total cost $114.50 $961,800.00 Profit ($15.50) ($130,200.00)O $682,584 $130,200 O $831,600 $490,308Step by Step Solution
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