Seidman Company manufactures and sells 30,000 units of product X per month. Each unit of product X sells for $16 and has a contribution margin of $7
If product X is discontinued, $85,000 in fixed monthly overhead costs would be eliminated and there would be no effect on the sales volume of Seidman Company's other products. If product X is discontinued, Seidman Company's monthly income before taxes should:
A. Increase by $210,000.
B. Increase by $125,000.
C. Decrease by $210,000.
D. Decrease by $125,000.
D
($7 × 30,000) - $85,000 = $125,000
You might also like to view...
Historically, the average proportion of defective bars has been 0.015. Samples will be of 100 bars each. Construct a p-chart using z = 3. What is the value of LCL?
A) less than or equal to 0.01 B) greater than 0.01 but less than or equal to 0.02 C) greater than 0.02 but less than or equal to 0.03 D) greater than 0.03
The information systems steering committee is composed of information systems managers and end-user managers responsible for overseeing several specific information systems projects
Indicate whether the statement is true or false