HiTech manufactures two products: Regular and Super. The results of operations for 20x1 follow. Fixed manufacturing costs included in cost of goods sold amount to $3 per unit for Regular and $20 per unit for Super. Variable selling expenses are $4 per unit for Regular and $20 per unit for Super; remaining selling amounts are fixed.
Disregard the information in the previous question. If HiTech eliminates Regular and uses the available capacity to produce and sell an additional 1,500 units of Super, what would be the impact on operating income?
A) $28,000 increase
B) $45,000 increase
C) $55,000 increase
D) $85,000 increase
E) None of the other answers are correct.

Question

HiTech manufactures two products: Regular and Super. The results of operations for 20x1 follow.  Fixed manufacturing costs included in cost of goods sold amount to $3 per unit for Regular and $20 per unit for Super. Variable selling expenses are $4 per unit for Regular and $20 per unit for Super; remaining selling amounts are fixed.
Disregard the information in the previous question. If HiTech eliminates Regular and uses the available capacity to produce and sell an additional 1,500 units of Super, what would be the impact on operating income?
A) $28,000 increase 
B) $45,000 increase 
C) $55,000 increase 
D) $85,000 increase 
E) None of the other answers are correct.

Quizplus · Accepted Answer

The Answer of HiTech manufactures two products: Regular and Super. The results of operations for 20x1 follow.  Fixed manufacturing costs included in cost of goods sold amount to $3 per unit for Regular and $20 per unit for Super. Variable selling expenses are $4 per unit for Regular and $20 per unit for Super; remaining selling amounts are fixed.
Disregard the information in the previous question. If HiTech eliminates Regular and uses the available capacity to produce and sell an additional 1,500 units of Super, what would be the impact on operating income?
A) $28,000 increase 
B) $45,000 increase 
C) $55,000 increase 
D) $85,000 increase 
E) None of the other answers are correct.

HiTech Manufactures Two Products: Regular and Super