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What would have been the profit for cn and ag

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Reference no: EM132475311

Analyze whether Rainier Fasteners should drop the SS line as Oliver Douglas suggested.

Question a. Estimate what the effect on profit would have been if the SS line had been dropped at the beginning of 2016, assuming cost behavior follows the assumptions outlined in Exhibit 2.

Question b. If Rainier had dropped SS at the beginning of 2016, what would have happened to the total amount of indirect costs, assuming these indirect costs are fixed? What would have happened to the amounts allocated to CN and AG, respectively?

Question c. What would have been the profit for CN and AG in 2016 if the SS line had been dropped? What do you think Oliver would recommend when he sees the profit on CN and AG after the SS line has been dropped? Would you recommend a different decision than Oliver?

Attachment:- rainier.rar

Reference no: EM132475311

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