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thank you Last year, Fordy Company has reported the results shown in the below table in relation to the manufacture and the sale of one
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Last year, Fordy Company has reported the results shown in the below table in relation to the manufacture and the sale of one of its products, the product S30. The company is considering discontinuing the manufacture and the sale of the product S30. If the product S30 is not dropped, the operating results shown below are expected to continue in the foreseeable future. The fixed manufacturing overhead includes the costs of production facilities and equipment that the product S30 shares with other products produced by Fordy Company. If this product is dropped, there will be no change in the fixed manufacturing costs of the company. Item Amount 15,000 units Number of Units Manufactured and Sold Unit Selling Price Variable Cost of Goods Sold Variable Distribution Costs Fixed Advertising Expense Salary of Product Line Manager Fixed Manufacturing Overhead Net Operating Loss $160 per unit $1,125,000 $300,000 $600,000 $140,000 $300,000 ($65.000) 20. Assuming that dropping the S30 product line will result in an increase of $300,000 in the contribution margin of other product lines, how many units of the product S30 will the company need to sell next year in order to be as well off as if this product has just been dropped, and the company has enjoyed the increase in the contribution margin from other products?* O 1,875 units O 1,000 units 15,000 units O 16,000 units O None of the above Step by Step Solution
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