Answers
| 5 | ||
| Variable cost of goods sold | 6.66 | =412254/61900 |
| Incremental revenue | 47960 | =4360*11 |
| Incremental costs: | ||
| Variable cost of goods sold | 29038 | =4360*6.66 |
| Total Incremental costs | 29038 | |
| Profits increase | 18922 | |
| Option E $18,922 is correct | ||
| 6 | ||
| Increase in cost of goods sold | 4098 | =4360*(0.74+0.20) |
| Rental of Equipment | 1000 | |
| Total effect on profit | 5098 | |
| Option D $5,098 is correct | ||
| 7 | ||
| Reduction in Profits | 30950 | =61900*(19-18.50) |
| Option C $30,950 is correct |
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