TechCo a manufacturing company manufactures two products: Regular and Super. The results of operations for 20x1 are pictured:

Fixed manufacturing costs included in cost of goods sold amount to $3 per unit for Regular and $20 per unit for Super. Variable selling expenses are $4 per unit for Regular and $20 per unit for Super; remaining selling amounts are fixed.

If TechCo eliminates Regular and uses the available capacity to produce and sell an additional 1,500 units of Super, what would be the impact on operating income?

otal Regular 10,000 $240,000 Super Units Sales Less: Cost of goods sold180,000 Gross margin Less: Selling expenses Operating income 700 $740,000 481,000 $259,000 4,000 $125,000 13.700 S980,000 661.000 S319,000 94.000 $125,000 $ 60,000 60,000 13