Sambo Limited is considering eliminating Model A02777 because of losses over the past quarter The past...

 

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Sambo Limited is considering eliminating Model A02777 because of losses over the past quarter The past three months of information for Model A02777 are summarised below Sales Direct material Direct labour Overheads Operating loss R400 000 R170 000 R100 000 R140 000 R10 000 Overhead costs are 60% variable, and the remaining 40% is depreciation of special equipment for model A02777 that has no resale value if Model A02777 is dropped from the product line, operating income will a decrease by R130 000 Ob increase by R10 000 O decrease by R46 000 Od increase by R56 000 Sambo Limited is considering eliminating Model A02777 because of losses over the past quarter The past three months of information for Model A02777 are summarised below Sales Direct material Direct labour Overheads Operating loss R400 000 R170 000 R100 000 R140 000 R10 000 Overhead costs are 60% variable, and the remaining 40% is depreciation of special equipment for model A02777 that has no resale value if Model A02777 is dropped from the product line, operating income will a decrease by R130 000 Ob increase by R10 000 O decrease by R46 000 Od increase by R56 000

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ANS WER d increase by R 56 000 WORK ING Decre ase in sales R 400 000 Decre as... View the full answer