Question 10 bailey company manufactures and sells a

Question 10
Bailey Company manufactures and sells a number of products, including Product R.
Results from last year from the sale of Product R appear below :
Sales revenue ............................. $750,000
Variable production costs ................. 450,000
Sales commissions ......................... 110,000
Salary of product manager .................
Advertising expense ....................... 80,000
Allocated general overhead ................
Net operating loss ........................ <55,000>
Bailey Company is considering eliminating the production and sale of Product R. The
company has determined that if Product R is discontinued, the contribution margin of
its other products will increase by $40,000 .
Based on a cost analysis, the management of Bailey Company has determined that if
Product R is discontinued the company's net income will increase by $25,000.
Calculate the amount of allocated general overhead cost for Product R incurred last
year .
?
?
25,000
= -55,000