30) Alpha is considering eliminating Model AE2 from its camera line. Recent info for Model AE2 is below: Sales (1,000 units) Manufacturing costs: $300,000 Direct materials 150,000 Direct labor ($15 per hour) Overhead 100,000 Operating loss ($10,000) 60,000 Overhead costs are 70% variable and the remaining 30% are fixed and unavoidable. If Model AE2 is dropped from the product line, what will be the effect on operating income? (please list dollar value and the direction of the change in operating income)

30) Alpha is considering eliminating Model AE2 from its camera line. Recent info for Model AE2 is below: Sales (1,000 units) Manufacturing costs: $300,000 Direct materials 150,000 Direct labor ($15 per hour) Overhead 100,000 Operating loss ($10,000) 60,000 Overhead costs are 70% variable and the remaining 30% are fixed and unavoidable. If Model AE2 is dropped from the product line, what will be the effect on operating income? (please list dollar value and the direction of the change in operating income)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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