Unformatted text preview: Clayton has determined that if they accept the offer, 40% of the fixed overhead allocated to the rechargers will be avoidable. Question : By what amount will the company’s net income increase or decrease if they outsource? Be sure to indicate if net income would increase or decrease. Answer: $________ Problem III: Layno Products installs standard and deluxe walk-in closets. Most of the installation process of the closets is done using direct labor. There are a maximum of 6,000 direct labor hours available each year. Selected data related to each product is as follows: Standard Deluxe Sales price per unit $1,000 $4,000 Variable costs per unit 700 2,000 Direct labor hours per unit 3 6 The company believes that there is sufficient demand for the sale and installation of up to 1,000 standard and 800 deluxe closets each year. Question : How many of each type should be installed in order for the company to maximize profits? Answers: _______ deluxe and ________ standard...
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- Winter '08
- Managerial Accounting, Economics of production, special order cakes