Maurice Tutor

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    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 24 Aug 2017 My Price 8.00

Cocino Company

Cocino Company produces blenders and coffeemakers. During the past year, the company produced and sold 100,000 blenders and 25,000 coffeemakers. Fixed costs for Cocino totaled $250,000, of which $90,000 can be avoided if the blenders are not produced and $45,000 can be avoided if the coffee makers are not produced.

Revenue and variable cost information follow:

 

Text Box: Blenders Coffee Makers Variable expenses per appliance $20 $43 Selling price per appliance 22 45                                       

 

Required

1.    Prepare product-line income statements. Segregate direct and common fixed costs.

2.    What would the effect be on Cocino’s profit if the coffeemaker line is dropped? The blender line?

3.    What would the effect be on firm profits if an additional 10,000 blenders could be produced (using existing capacity) and sold for $20.50 on a special-order basis? Existing sales would be unaffected by the special order.

 

 

Answers

Maurice Tutor
(5)
Status NEW Posted 24 Aug 2017 10:08 PM My Price 8.00

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