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MCS,MBA(IT), Pursuing PHD
Devry University
Sep-2004 - Aug-2010
Assistant Financial Analyst
NatSteel Holdings Pte Ltd
Aug-2007 - Jul-2017
Alard Company produces blenders and coffee makers. During the past year, the company produced and sold 65,000 blenders and 75,000 coffee makers. Fixed costs for Alard totaled $340,000, of which $184,000 can be avoided if the blenders are not produced and $142,500 can be avoided if the coffee makers are not produced. Revenue and variable cost information follow:
| Selling price per appliance | $24 | $29 |
| Variable expenses per appliance | 18 | 27 |
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| 1. | Prepare segmented income statements. Separate direct and common fixed costs. |
| 2. | What would the effect be on Alard's profit if the coffee maker 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 $21.50 on a special-order basis? Existing sales would be unaffected by the special order. |
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