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Appel Inc. has two product lines: phones and laptops. They are considering dropping the phone segment to improve their net operating income. Data for each per unit is as follows: Revenue Variable Costs Traceable Fixed Costs Allocated Fixed Costs Total Per Unit Phones Laptops $530 $1099 $245 $430 $300 $209 $110 $130 $(125) $330 Assume no allocated fixed costs are avoidable if the phone segment is dropped, but 100% of

Appel Inc. has two product lines: phones and laptops. They are considering dropping the phone segment to improve their net operating income. Data for each per unit is as follows: Revenue Variable Costs Traceable Fixed Costs Allocated Fixed Costs Total Per Unit Phones Laptops $530 $1099 $245 $430 $300 $209 $110 $130 $(125) $330 Assume no allocated fixed costs are avoidable if the phone segment is dropped, but 100% of

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Appel Inc. has two product lines: phones and laptops. They are considering dropping the phone segment to improve their net operating income. Data for each per unit is as follows: Revenue Variable Costs Traceable Fixed Costs Allocated Fixed Costs Total Per Unit Phones Laptops $530 $1099 $245 $430 $300 $209 $110 $130 $(125) $330 Assume no allocated fixed costs are avoidable if the phone segment is dropped, but 100% of traceable fixed costs can be avoided. If Appel Inc. sells 1,824 units of phones and 555 units of laptops, how much will their net operating income increase/decrease if the phone segment is dropped? Round your answer to the nearest dollar.
Transcribed Image Text:Appel Inc. has two product lines: phones and laptops. They are considering dropping the phone segment to improve their net operating income. Data for each per unit is as follows: Revenue Variable Costs Traceable Fixed Costs Allocated Fixed Costs Total Per Unit Phones Laptops $530 $1099 $245 $430 $300 $209 $110 $130 $(125) $330 Assume no allocated fixed costs are avoidable if the phone segment is dropped, but 100% of traceable fixed costs can be avoided. If Appel Inc. sells 1,824 units of phones and 555 units of laptops, how much will their net operating income increase/decrease if the phone segment is dropped? Round your answer to the nearest dollar.
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