A study has been conducted to determine if Product A should…

A study has been conducted to determine if Product A should be dropped. Sales of the product total $236,000 per year; variable expenses total $165,200 per year. Fixed expenses charged to the product total $106,200 per year. The company estimates that $47,200 of these fixed expenses will continue even if the product is dropped. These data indicate that if Product A is dropped, the company’s overall net operating income would:

Eley Corporation produces a single product. The cost of prod…

Eley Corporation produces a single product. The cost of producing and selling a single unit of this product at the company’s normal activity level of 40,000 units per month is as follows: Direct materials $42.60 Direct labor $8.10 Variable manufacturing overhead $1.10 Fixed manufacturing overhead $17.30 Variable selling & administrative expense $1.80 Fixed selling & administrative expense $8.00 The normal selling price of the product is $86.10 per unit. An order has been received from an overseas customer for 2,000 units to be delivered this month at a special discounted price. This order would have no effect on the company’s normal sales and would not change the total amount of the company’s fixed costs. The variable selling and administrative expense would be $1.20 less per unit on this order than on normal sales. Direct labor is a variable cost in this company. Suppose there is not enough idle capacity to produce all of the units for the overseas customer and accepting the special order would require cutting back on production of 700 units for regular customers. The minimum acceptable price per unit for the special order is closest to:

Carrie Corporation makes three products: a standard model, a…

Carrie Corporation makes three products: a standard model, a deluxe model, and a luxury model. The financial statements of the products are as follows:Standard ModelDeluxe ModelLuxury Model TotalSales Revenue $90,000$70,000$50,000$210,000Variable Costs30,00035,00025,00090,000Contribution Margin60,00035,00025,000120,000Less Fixed Costs:Salaries12,00020,0004,00036,000Rent10,00010,00010,00030,000Administrative 20,00010,0008,00038,000Operating Profit (loss)$18,000$(5,000)$3,000$16,000If the deluxe model product line was discontinued, all variable costs for that line could be avoided and $10,000 of the salaries associated with that model could be avoided. The other fixed costs are unavoidable. If the deluxe model product line is dropped, how will the company’s operating profit be impacted?