(Ch 10, 11, & 12)6 Help Save & Exit Submit Lusk Corporation produces and sells 1
ID: 2567479 • Letter: #
Question
(Ch 10, 11, & 12)6 Help Save & Exit Submit Lusk Corporation produces and sells 16,000 units of Product X each month The selling price of Product X is $30 per unit, and variable expenses are $24 O per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $70,000 of the $110,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the annual financial advantage (disadvantage) for the company of eliminating this product should be: Multiple Choice $54,000 $54,000 $56,000) $14000 ,Prev, 26 of 34 lll Next >Explanation / Answer
Profit on continue product X :
Effect on discontinue operation
so answer is c) ($56000)
Sales ( 30*16000) 480000 Less: Variable cost (24*16000) (384000) Less: Fixed cost (110000) Loss if product continue (14000)Related Questions
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