TB MC Qu. 13-36 (Algo) Lusk Corporation produces and sells...Lusk Corporation produces and sells 15,300 units of Product X each month. The selling price of Product X is $23 per unit, and variableexpenses are $17 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $74,000 ofthe $103,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X isdiscontinued, the monthly financial advantage (disadvantage) for the company of eliminating this product should be:Multiple Choice($62,800)O$11,200

Avoidable costs (103,000 - 74,000) 29,000.00 Lost contribution margin (15,300 units x (23-17))…

Answered: TB MC Qu. 13-36 (Algo) Lusk Corporation…

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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number 7 Lusk Corporation produces and sells 15,000 units of Product X each month. The selling price of Product X is $40 per unit, and variable expenses are $32 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $90,000 of the $120,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the company will be worse off by:
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