Question
Sparkle, a jewelry retailer, sells a piece of earrings for a selling price of $450, with a variable cost of $150 per unit and a
Sparkle, a jewelry retailer, sells a piece of earrings for a selling price of $450, with a variable cost of $150 per unit and a fixed cost of $100 000 per annual. Due to COVID-19, many factories and plants have been forced to close overseas. Therefore, Sparkle had to seek supplies from other sources at a higher price. The cost of materials for the earrings increased by $25 because of this change.
What is Attyre's change in profit due to these changes if they produce and sell 5000 earrings in one year?
Decrease of $938 400
Decrease of $1 000 000
Increase of $487 000
Increase of $561 819
Decrease of $125,000
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Management Accounting
Authors: Kim Langfield Smith, Helen Thorne, David Alan Smith, Ronald W. Hilton
7th Edition
978-1760421144, 1760421146
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