Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The officers of Bradshaw Company are reviewing the profitability of the companys four products and the potential effects of several proposals for varying the product

The officers of Bradshaw Company are reviewing the profitability of the companys four products and the potential effects of several proposals for varying the product mix. An excerpt from the income statement and other data follow:

Totals

Product P

Product Q

Product R

Product S

Revenues

$62,600

$10,000

$18,000

$12,600

$22,000

Cost of goods sold

44,274

4,750

7,056

13,968

18,500

Gross profit

$18,326

$ 5,250

$10,944

$ (1,368)

$ 3,500

Operating expenses

12,012

1,990

2,976

2,826

4,220

Income before income taxes

$ 6,314

$ 3,260

$ 7,968

$ (4,194)

$ (720)

Units sold

1,000

1,200

1,800

2,000

Sales price per unit

$10.00

$15.00

$7.00

$11.00

Variable cost of goods sold per unit

2.50

3.00

6.50

6.00

Variable operating expenses per unit

1.17

1.25

1.00

1.20

Production of P can be doubled by adding a second shift, but higher wages must be paid, increasing the variable cost of goods sold to $3.50 for each additional unit. If the 1,000 additional units of P can be sold at $10 each, the total effect on income before income taxes will be __________?

Please show your work too, thank you!

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Endangered Economies How The Neglect Of Nature Threatens Our Prosperity

Authors: Geoffrey Heal

1st Edition

0231180845, 9780231180849

More Books

Students also viewed these Accounting questions