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Sudex produces two types of its products. Product 1 Product 2 Units produced and sold 4,150 10,200 Selling price per unit P15 P13 Variable costs per unit 9. The company's fixed costs totaled 72,000, of which 15,200 can be directly traced to Product 1 and 40,200 can be directly traced to Product 2. The effect on the firm's profits if Product 2 is dropped would be a: a.10,800 increase b.35,800 increase c.35,800 decrease d.10,800 decrease

Sudex produces two types of its products. Product 1 Product 2 Units produced and sold 4,150 10,200 Selling price per unit P15 P13 Variable costs per unit 9. The company's fixed costs totaled 72,000, of which 15,200 can be directly traced to Product 1 and 40,200 can be directly traced to Product 2. The effect on the firm's profits if Product 2 is dropped would be a: a.10,800 increase b.35,800 increase c.35,800 decrease d.10,800 decrease

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sudex produces two types of its products. Product 1 Product 2 Units produced and sold 4,150 10,200 Selling price per unit P15 P13 Variable costs per unit 9 The company's fixed costs totaled 72,000, of which 15,200 can be directly traced to Product 1 and 40,200 can be directly traced to Product 2. The effect on the firm's profits if Product 2 is dropped would be a: a.10,800 increase b.35,800 increase c.35,800 decrease d.10,800 decrease
Transcribed Image Text:Sudex produces two types of its products. Product 1 Product 2 Units produced and sold 4,150 10,200 Selling price per unit P15 P13 Variable costs per unit 9 The company's fixed costs totaled 72,000, of which 15,200 can be directly traced to Product 1 and 40,200 can be directly traced to Product 2. The effect on the firm's profits if Product 2 is dropped would be a: a.10,800 increase b.35,800 increase c.35,800 decrease d.10,800 decrease
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