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Relevant costs for decision-making: keep or drop (11 marks) Information for Russett Industries' sales and production for the year follows: Total Product N 8,022 Units
Relevant costs for decision-making: keep or drop (11 marks) Information for Russett Industries' sales and production for the year follows: Total Product N 8,022 Units produced and sold Selling price per unit Variable expenses per unit Product A 10,022 $16 $10 Product G 2,978 $25 $20 $15 $23 The company's fixed costs totalled $75,000, of which $30,000 can be avoided if Product A is dropped, $25,000 can be avoided if Product N is dropped, and $8,000 can be avoided if Product G is dropped. $75,000 Total fixed costs Avoidable fixed costs $30,000 $25,000 $8,000 Relevant costs for decision-making: Keep or drop Information for Russett Industries sales and production for the year follows: Product A Product N Product G Units produced and sold Selling price per unit Variable expenses per unit $20 $16 S10 S25 $23 SIS The company's fixed costs totalled $75,000, of which $30,000 can be avoided if Product A is dropped, 525,000 can be avoided if Product N is dropped, and $8,000 can be avoided if Product G is dropped. Required: Write an email to the Marketing Manager with your recommendation as to whether any of the products should be dropped. Provide supporting calculations
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