Question: Question 1 ( 8 points ) Sutton Industries produces two models of televisions, Standard and Luxury. It sells 1 0 0 , 0 0 0

Question

1 (8

points

)

Sutton Industries produces two models of televisions, Standard and Luxury. It sells

100, 000

Standard televisions and

15, 000

Luxury televisions annually. Sutton switched from traditional costing to activity

-

based costing and discovered that the cost assigned to Luxury televisions increased so dramatically that the Luxury was now only marginally profitable.

Instructions

Give a probable explanation for this shift.

Question 1(8 points) Sutton Industries produces two models of televisions, Standard

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