Remaining Time: 2 hours, 51 minutes, 52 seconds. opportunity cost sunk cost Ques
ID: 2413277 • Letter: R
Question
Remaining Time: 2 hours, 51 minutes, 52 seconds. opportunity cost sunk cost Question Completion Status variable cost QUESTION 11 The TgerW Conpany produces three types of golt dlubs wood aluminum, and hard rubber. recent period reveals the following A aggregated amounts f ted amounts from the income statement for a Sales $500,000 $200,000 $65,000 $765,000 Variable expenses325000 140,000 Contribution margin Fized expense Net income (Dom) 100.000 175,000 60,000 7,000 242,000 22,000 132,000 50 145.00 $10.00 fired e for the hard rubber line are avoidable. What will be total net income if the line is dropped? Asimo 50% of 125 000 103.000 $114 000 $140 000 QUESTION 12 Od Saie md SImit tonie and ?bmit. Click Sape AllAnsu ers to save ail ansuers. Save AlExplanation / Answer
Solution:
If the hard rubber line is dropped, Unavoidable fixed cost that would continue to occur = $22000*50% = $11,000
Total Net income if Hard rubber line is dropped = net income from wood line + net income from aluminium line - unavoidable fixed cost of hard rubber line
= $100000 + $25000 - $11000 = $114,000
Hence, third option "$114,000" is correct.