The management of Furrow Corporation is considering dro upcoming year appear below: Sales $970,000 Variable expenses $401,000 Fixed manufacturing expenses $383,000 Fixed selling and administrative expenses $ 263,000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $259,000 of the fixed manufacturing expenses and $220,000 of the fixed selling and administrative expenses are avoidable if product L07E is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for he upcoming year would be: $(90,000) O $(77,000) O $77,000 $90,000

The management of Furrow Corporation is considering dro upcoming year appear below: Sales $970,000 Variable expenses $401,000 Fixed manufacturing expenses $383,000 Fixed selling and administrative expenses $ 263,000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $259,000 of the fixed manufacturing expenses and $220,000 of the fixed selling and administrative expenses are avoidable if product L07E is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for he upcoming year would be: $(90,000) O $(77,000) O $77,000 $90,000

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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Reton Company is reviewing the results of itts production during tthe most recent fiscal year. Due to seasonality of the business, the volume of production fluctuates during the year. Renton would like to analyze the fixed and variable costs for purposes of estimating the budget for the upcoming fiscal year. The cost accountant provided the following data: UNITS PRODUCED TOTAL COST January 1,100 ₱12,530 February 1,200 13,260 March 1,400 14,720 April 1,500 15,450 May 1,800 17,640 June 2,100 19,830 July 2,000 19,100 August 1,900 18,370 September 1,400 14,720 October 1,500 15,450 November 1,300 13,990 December 1,700 16,910 TOTAL 18,900 191,970 Required: Calculate the variable cost per unit and the total fixed cost using the following: High-low point method Average method (compare the two lowest quarters) Graphical method Method of least squares