Mercer has three product lines in its retail stores: books, videos, and music. Results of...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Mercer has three product lines in its retail stores: books, videos, and music. Results of the fourth quarter are presented below:
| Books | Music | Videos | Total | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Units sold | 1,000 | 2,000 | 2,000 | 5,000 | ||||||||||
| Revenue | $ | 20,000 | $ | 40,000 | $ | 25,000 | $ | 85,000 | ||||||
| Variable departmental costs | 17,000 | 22,000 | 12,000 | 51,000 | ||||||||||
| Direct fixed costs | 1,000 | 3,000 | 2,000 | 6,000 | ||||||||||
| Allocated fixed costs | 7,000 | 7,000 | 7,000 | 21,000 | ||||||||||
| Net income (loss) | $ | (5,000 | ) | $ | 8,000 | $ | 4,000 | $ | 7,000 | |||||
The allocated fixed costs are unavoidable. Demand of individual products are not affected by changes in other product lines. What will happen to profits if Mercer discontinues the Books product line?
| If Mercer discontinues the Books product line profit will select an option increasedecrease by $enter a dollar amount |
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.