Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. q7.37: sprockets inc. makes three models of gears:

Q7.37: Sprockets Inc. makes three models of gears: small, medium, and large. Condensed income statement...

50.1K

Verified Solution

Question

Accounting

image

Q7.37: Sprockets Inc. makes three models of gears: small, medium, and large. Condensed income statement data related to the three models are as follows: Small Medium Large Total Sales Variable costs Cont. margin Fixed costs Net income $608,000 147,000 461,000 289,000 $172,000 $712,000 $350,000 $1,670,000 438,000 523,000248,0001,232,000 865,000 $214,000| ($ 19,000) $367,000 189,000 102,000 309,000 267,000 Sprockets is considering discontinuing the large gear. If it does so, 70% of its fixed costs would be eliminated. What would happen if Sprockets stops manufacturing the large gear? A The firm's net income would drop by $61,100 B The firm's net income would drop by $167,900 C The firm's net income would increase by $186,900 D The firm's net income would increase by $80,100

Answer & Explanation Solved by verified expert
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!
Become a Member

Other questions asked by students

Accounting
1.2K views

Cost of Goods Manufactured for a Manufacturing Company Two items are omitted from each of the...

General Management
1.2K views

after reading the book 'The Goal by Eliyahu M. Goldratt and Jeff Cox' Answer 3. What are the...

Accounting
1.2K views

Problem 1 Hood lease equipment from Ford on January 1, 2019. Ford purchased the equipment from a...

Biology
1.2K views

Which statement best characterizes the political climate in Washington D C with regard to Reconstruction...

Biology
1.2K views

A behavior that is instinctual is considered a n behavior A innate B optimal C...

Physics
1.2K views

If two SHMs are represented by equations TC 5 3 Y 4 sin 3nt Y...

Physics
1.2K views

35 A spherical body of radius R is allowed to roll down on an incline...

Algebra
1.2K views

Calculate the distance from point P(2, 4, 1) to the line:Vector r = (1, 2,...

Accounting
1.2K views

Highland Company produces a lightweight backpack that is popular with college...

Accounting
1.2K views

Assume the following (1) selling price per unit = $30,(2) variable expense per unit =...

Accounting
1.2K views

The following information is taken from the financial statements of Clybourn Company for the current...

Accounting
1.2K views

S17-6 Evaluating current ratio Requirements 1. Compute Accel's Companies' current ratio at May 31, 2018...