QUESTION: GPS Corporation, a manufacturer of global positioning system devices, is considering eliminating the Oceania...
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Accounting
QUESTION:
GPS Corporation, a manufacturer of global positioning system devices, is considering eliminating the Oceania Model from its line of devices because of losses over the past year. The past year's information on the Oceania Model is provided below:
Sales units $
Manufacturing costs:
Direct materials
Direct labor
Overhead
Gross margin $
Overhead costs are variable, and the remaining is an allocation of the general manager's salary. The general manager is over multiple product lines.
If the Oceania Model is dropped, what will be the most likely impact on gross margin for the firm in the next year?
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