HW33_34_35sol

# HW33_34_35sol - Do not discontinue since profits will drop...

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Problem 33 Effect on Profit Incremental revenue decrease \$(30,000) Incremental variable cost savings 17,800 Incremental direct fixed costs saved 6,000 Incremental decrease in profit if tigers are discontinued \$(6,200) Do not discontinue since profits will decline by \$6,200. Problem 34 Effect on Profit Calculation Incremental revenue decrease - Wise \$(50,000) Incremental revenue increase - Bud 10,500 \$70,000*1 Incremental variable cost savings - Wise 26,000 Incremental variable cost increase - Bud (4,800) \$32,000*1 Incremental direct fixed costs saved 10,000 Incremental decrease in profit if Wise is discontinued \$(8,300)

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Unformatted text preview: Do not discontinue since profits will drop by \$8,300 Problem 35 1 Incremental cost to buy \$(3,600) Incremental cost savings 3,700 Incremental increase in profit if bought/outsourced \$100 Answer D 2 Incremental revenue \$1,200 Incremental cost (\$1.60*800) (1,280) Incremental decrease in profit if order is accepted \$(80) Answer B 3 Incremental revenue per book \$5 Incremental cost per book (6) Incremental decrease in profit if color printing used \$(1) Answer F 4 \$8,000 of Direct fixed costs will be eliminated, but the \$12,000 of allocated fixed will so the profit will decline. Answer H ns: 15% 15% ll continue,...
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HW33_34_35sol - Do not discontinue since profits will drop...

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