Question
Nana Kay Ltd is a multiproduct firm. The revenues of a single product, Germ-D, are GH$ 200,000 when 10,000 units are sold. Variable costs are
Nana Kay Ltd is a multiproduct firm. The revenues of a single product, Germ-D, are GH$\n200,000 when 10,000 units are sold. Variable costs are GH$\n16 per unit. Direct fixed expenses of GH$\n25,000 consist primarily of depreciation on equipment specialized to the product. By what amount will Nana Kay Ltd\' cash flow change if the product is dropped? Would you advise Nana Kay Ltd to drop Germ-D?
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