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Author Question: Roadrunner Manufacturing produces Item Q with variable manufacturing costs of $16/unit. The selling ... (Read 134 times)

bio_gurl

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Roadrunner Manufacturing produces Item Q with variable manufacturing costs of $16/unit.  The selling price of Item Q is $20/unit.  The fixed manufacturing overhead cost is $75,000.  A normal production run includes 150,000 units.  Roadrunner Manufacturing has discovered an additional process to change Item Q into Item QR.  Additional costs are estimated at $3/unit.  Item QR would sell for $24/unit.  Additional fixed manufacturing overhead costs of $4,500 would be incurred if Item QR is produced.  There would be no change in the number of units produced.

By what percent would Roadrunner Manufacturing's operating income improve if the change is made?


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Marked as best answer by bio_gurl on Jan 4, 2020

dyrone

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bio_gurl

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Reply 2 on: Jan 4, 2020
Great answer, keep it coming :)


smrtceo

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

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