MechandizeXZ Company produces two product lines T-shirts and Sweatshirts Product profitability is analyzed as follows: T-SHIRTS...

 

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MechandizeXZ Company produces two product lines T-shirts and Sweatshirts Product profitability is analyzed as follows: T-SHIRTS SWEATSHIRTS 3 Production and sales volume Selling price Direct material Direct labour 65544 units $16.00 $2.57 $4.50 $2.00 $4.00 20615 units $29.00 $ 5.00 $8.65 Manufacturing overhead $ 3.00 Selling and administrative $7.00 Based on the information provided, compute the projected decline in operating income if the direct materials costs of T-Shirts increase to $3.44 per unit and direct labour costs of Sweatshirts increase to $15.25 per unit. MechandizeXZ Company produces two product lines T-shirts and Sweatshirts Product profitability is analyzed as follows: T-SHIRTS SWEATSHIRTS 3 Production and sales volume Selling price Direct material Direct labour 65544 units $16.00 $2.57 $4.50 $2.00 $4.00 20615 units $29.00 $ 5.00 $8.65 Manufacturing overhead $ 3.00 Selling and administrative $7.00 Based on the information provided, compute the projected decline in operating income if the direct materials costs of T-Shirts increase to $3.44 per unit and direct labour costs of Sweatshirts increase to $15.25 per unit.

Answer rating: 100% (QA)

To compute the projected decline in operating income we need to calculate the current operating income and the projected operating income after the co... View the full answer