Closing the Town Store would result in 35% of its traceable fixed continuing and a 10%...

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Closing the Town Store would result in 35% of its traceable fixed continuing and a 10% decrease in Mall Store sales and variable costs. What is the increase (decrease) in operating income if the Town store is closed? Total Mall Town Sales $260,000 $140,000 $120,000 Variable costs $174,000 $90,000 $84,000 Contribution margin $86,000 $50,000 $36,000 Traceable fixed costs $60,000 $28,000 $32,000 Segment margin $26,000 $22,000 $4,000 Common fixed expenses $12,000 $7,000 $5,000 Net income $14,000 $15,000 ($1,000) ($20,200) ($29,200) O ($15,200) ($38,800) ($29,800) Your Company produces a single product. The cost of producing and selling a single unit of this product is as follows: Direct materials $18. Direct labor $6.8 $2.4 Variable factory overhead Fixed factory overhead $11. Variable selling expense $1.9 Fixed selling expense $5.1 Original cost per unit $45. An order has been received from an overseas customer for 2,000 units to be delivered this month at a special discounted price of $41.60 per unit. If the special order is accepted, variable selling costs would decrease by 40%. The customer wants the item to be engraved. This involves an additional $1.50 of direct labor per unit. The company will also need to purchase an engraving machine for $20,000. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. If the special order is accepted, what is the impact on the company's overall net operating income? $4,280 $24,090 $3,520 $11. Fixed factory overhead Variable selling expense $1.9 Fixed selling expense $5.1 Original cost per unit $45. An order has been received from an overseas customer for 2,000 units to be delivered this month at a special discounted price of $41.60 per unit. If the special order is accepted, variable selling costs would decrease by 40%. The customer wants the item to be engraved. This involves an additional $1.50 of direct labor per unit. The company will also need to purchase an engraving machine for $20,000. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. If the special order is accepted, what is the impact on the company's overall net operating income? $4,280 $24,090 $3,520 $7,090 $6,710 $23,710 Closing the Town Store would result in 35% of its traceable fixed continuing and a 10% decrease in Mall Store sales and variable costs. What is the increase (decrease) in operating income if the Town store is closed? Total Mall Town Sales $260,000 $140,000 $120,000 Variable costs $174,000 $90,000 $84,000 Contribution margin $86,000 $50,000 $36,000 Traceable fixed costs $60,000 $28,000 $32,000 Segment margin $26,000 $22,000 $4,000 Common fixed expenses $12,000 $7,000 $5,000 Net income $14,000 $15,000 ($1,000) ($20,200) ($29,200) O ($15,200) ($38,800) ($29,800) Your Company produces a single product. The cost of producing and selling a single unit of this product is as follows: Direct materials $18. Direct labor $6.8 $2.4 Variable factory overhead Fixed factory overhead $11. Variable selling expense $1.9 Fixed selling expense $5.1 Original cost per unit $45. An order has been received from an overseas customer for 2,000 units to be delivered this month at a special discounted price of $41.60 per unit. If the special order is accepted, variable selling costs would decrease by 40%. The customer wants the item to be engraved. This involves an additional $1.50 of direct labor per unit. The company will also need to purchase an engraving machine for $20,000. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. If the special order is accepted, what is the impact on the company's overall net operating income? $4,280 $24,090 $3,520 $11. Fixed factory overhead Variable selling expense $1.9 Fixed selling expense $5.1 Original cost per unit $45. An order has been received from an overseas customer for 2,000 units to be delivered this month at a special discounted price of $41.60 per unit. If the special order is accepted, variable selling costs would decrease by 40%. The customer wants the item to be engraved. This involves an additional $1.50 of direct labor per unit. The company will also need to purchase an engraving machine for $20,000. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. If the special order is accepted, what is the impact on the company's overall net operating income? $4,280 $24,090 $3,520 $7,090 $6,710 $23,710

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