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Zoota Ltd makes three products: Alpha, Beta, and Gamma. The selling price and per unit costs are shown below. 1 1 Alpha Beta Gamma Selling
Zoota Ltd makes three products: Alpha, Beta, and Gamma. The selling price and per unit costs are shown below. 1 1 Alpha Beta Gamma Selling price ($) 10 15 14 Cost per unit: ($) Variable costs 4 8 6.0 Depreciation expense - equipment 2 0.5 Equipment maintenance cost Allocated rent 2 2 Other allocated fixed cost 1 4 2 Total expenses 8 14 11.5 Net profit/loss ($) 2 2.5 Sale volume (units) per year 60,000 120,000 60,000 Zoota is considering stopping the production of Gamma. Rental expense for Alpha and Beta is allocated equally between the two products as they are produced in the same factory. Assume all rental contracts are rolled forward on an annual basis. 1 Calculate the total impact on Zoota's profit from dropping Gamma. Please incorporate a negative sign if the total impact is a reduction of profit. Round to 2 dec places
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