Reference no: EM131215914
A company produces? 1,000 packages of chicken feed per month. The sales price is? $4.00 per pack. Variable cost is? $1.50 per? unit, and fixed costs are? $1,700 per month. Management is considering adding a vitamin supplement to improve the value of the product. The variable cost will increase from? $1.50 to? $1.90 per? unit, and fixed costs will increase by? 20%. The company will price the new product at? $5 per pack. How will this affect operating? income? A. Operating income will decrease by? $1,240 per month. B. Operating income will decrease by? $260 per month. C. Operating income will increase by? $260 per month. D. Operating income will remain unchanged.
A company predicts its production and sales will be? 24,000 units. At that level of? activity, its fixed costs are budgeted at? $300,000, and its variable costs are budgeted at? $246,000. If its activity level declines to? 20,000 units, what will be its fixed costs and its variable costs?
A. ?Fixed, $250,000;? variable, $246,000
B. ?Fixed, $300,000;? variable, $205,000
C. ?Fixed, $300,000;? variable, $246,000
D.? Fixed, $250,000;? variable, $205,000
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For the purpose of preparing the flexible? budget
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: A company produces? 1,000 packages of chicken feed per month. The sales price is? $4.00 per pack. Variable cost is? $1.50 per? unit, and fixed costs are? $1,700 per month. Management is considering adding a vitamin supplement to improve the value of ..
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