brandicarney70p8jlsp
26.03.2020 •
Business
*Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out. Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the racing bikes? 2. Should the production and sale of racing bikes be discontinued? 3. Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines.
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Ответ:
D. $3.
Explanation:
Use following values to calculate the marginal revenue
Price Quantity Demanded
$7 1
$6 2
$5 3
$4 4
$3 5
Working
Price Quantity Demanded ___ Total revenue __ Marginal Revenue
P Q P x Q Additional revenue
$7 1 $7 $7
$6 2 $12 $5
$5 3 $15 $3
$4 4 $16 $1
$3 5 $15 -$1