Quph Company is considering adding a new type of product, Product K, to its product...
80.2K
Verified Solution
Link Copied!
Question
Accounting
Quph Company is considering adding a new type of product, Product K, to its product lines.
Below are revenue and variable-cost estimates prepared to help analyze this possible product introduction:
| Annual Sales | 12,500 units |
| Selling price per unit | $50 |
| Unit variable costs: | |
| Production | $20 |
| Selling | $9 |
If Product K is introduced, the product line will include $110,000 in annual fixed cost, composed of $27,000 in newly incurred fixed costs in production; $33,000 in newly incurred fixed costs in sales; and $50,000 in allocated corporate-level costs (reducing allocation to other product lines by $50,000).
Also, if Product K is introduced, it will likely boost sales of Quph Company's current products, increasing the total contribution margin from current products by $26,000.
Q. What is the change in the company's net operating income if the new product is introduced?
(Key in a positive number if it is an increase, a negative number if it is a decrease.)
A. $
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
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.