ACME Incorporated sells two products: widgets and gadgets. The following product information is available: widgets gadgets. Sales
Question:
ACME Incorporated sells two products: widgets and gadgets.
The following product information is available:
widgets gadgets.
Sales $60,000 $60,000
Variable expenses (% of sales) 70% 60%
Total fixed expenses are $48,000, of which $20,000 would disappear if widgets are discontinued and $18,000 would disappear if gadgets are discontinued.
Required:
1. Prepare a segmented income statement in good form.
2. Which product would result in a greater increase to operating income with an equal increase in sales? Why?
Introduction to Operations Research
ISBN: 978-1259162985
10th edition
Authors: Frederick S. Hillier, Gerald J. Lieberman