* Question Completion Status: Triangle Ltd. manufactures and sells three different products: Isosceles, Equilateral, and Scalene. Projected income statements by production line for the next year are presented below: Total Unit sales 635,000 Revenue Less variable cost of units sold Less fixed cost of units sold Gross margin Less variable administrative expenses Less fixed administrative expenses Operating income Isosceles Equilateral 10,000 500,000 $925,000 $1,000,000 285,000 350,000 304,200 289,000 335,800 361,000 270,000 200,000 Scalene 125,000 $575,000 150,000 166,800 258,200 80,000 $2,500,000 785,000 760,000 55,000 550,000 125,800 136,000 78,200 340,000 $(60,000) $25,000 $100,000 $ 65,000 The fixed administrative expenses are allocated to products in proportion to revenues. The fixed cost of units sold is allocated to products by various allocation bases, such as square metres for factory rent machine hours for repairs, and so on. Triangle's management is concerned about the loss for the isosceles product and is considering two alternative courses of corrective action Alternative A. The company would lease some new machinery for the production of sosteles. The annual rental on this Save and Subs Che Saue and Submit to save and submit. Click Save All Answers to save all annen XCO Remaining Time: 1 hour. 43 minutes, 09 seconds. > Question Completion Status: expenses Less fixed administrative expenses Operating income 125,800 136,000 78,200 340,000 $(60,000) $25,000 $100,000 $ 65,000 The fixed administrative expenses are allocated to products in proportion to revenues. The fixed cost of units sold is allocated to products by various allocation bases, such as square metres for factory rent machine hours for repairs, and so on. Triangle's management is concerned about the loss for the isosceles product and is considering two alternative courses of corrective action: Alternative A. The company would lease some new machinery for the production of isosceles. The annual rental on this new machinery would equal $50,000. Management expects that the new machinery would reduce variable production costs so that the total variable production costs for isosceles would be 20 percent of isosceles revenues. The new machinery would increase the total fixed costs and expenses (production and administrative) by $40,000 per year. Because of the increased quality of production of the new machine, it is expected that sales of isosceles will increase by 10%. Alternative B. The company would discontinue the manufacture of isosceles. Selling prices for Equilateral and Scalene would not change. Management expects that Scalene's production and revenues would increase by 50 percent. The removal of machinery would reduce the fixed costs and expenses by $30.000 per year. The remaining fixed costs and expenses allocated to Isosceles include $155,000 of rent expense per year. The spade previously used for isosceles can be rented to an outside organization for $157,500 per year. Required: Analyze the effects of Alternative A and Alternative B on operating income TTT Arial 9 11200) T-E- E Save and Submit Chal Savard Submit to me and submit. Clak Save All Auers to save all annars
