Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. use the following information to answer the next t

Use the following information to answer the next two questions: Pottery Unlimited has two product...

50.1K

Verified Solution

Question

Accounting

image

Use the following information to answer the next two questions: Pottery Unlimited has two product lines: cups and pitchers. Income statement data for the most recent year follow: Cups Pitchers Total Sales revenue $310,000 $150,000 $460,000 Variable expenses 235,000 120,000 355,000 Contribution margin 75,000 30,000 105,000 Fixed expenses 38,000 38,000 76,000 Operating income (loss) $37,000 $(8,000) $29,000 1. Assuming the Pitcher line at Pottery Unlimited is dropped, total fixed costs remain unchanged, and the space formerly used to produce the Pitcher line is used to double the production of Cups, how will operating income be affected? A) Increase $150,000 B) Increase $45,000 C) Increase $74,000 D) Decrease $45,000 2. Ignore your answer to question 1. If $20,000 of Pottery Unlimited's fixed costs will be eliminated by dropping the Pitcher line, how will operating income be affected? A) Increase $2,000 B) Decrease $20,000 C) Decrease $10,000 D) Increase $12,000

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Research and Explain past issues of Canadian HR publications that should considered in favour of an...

General Management
Q

Do the polynomials x^3 + x + 2, x^2 - x +2, -x^3 + x^2...

Advance Math
Q

Active transport occurs gradient across a cell membrane 1 toward 2 against 3 away from...

Biology
Q

When do modern humans show up in Earth's timeline?0.2 million years ago20,000 years ago2 million...

Biology
Q

What is the most likely reason why American birthrates declined in the 1920 s Overcrowding...

Biology
Q

1 1 of 3 Book rint rences Ine Tollowing financial statement information is from tive...

Basic Math
Q

IF = arccos x,-1 ? x ? 1, then(a)cos ? = x and ?...

Basic Math
Q

A nonprofit wants to understand the fraction of households that have elevated levels of lead...

Statistics
Q

Suveo Beech Corporation is a merchandising company that is preparing a...

Accounting
Q

A check drawn for $915 in payment of a liability was recorded in the company's...

Accounting
Q

PROBLEM 3-9 Preparing Journal Entries; T-Accounts; Cost Flows [LO4 - cc8; LO6 - cc12; LO...

Accounting
Q

Please answer in this format, thank you so much!! Kendra, Cogley, and Mei share...

Accounting