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Issue:

Business

 

Written by:

Brenda C

 

Date added:

February 8, 2014

 

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Grade:

A

 

No of pages / words:

2 / 417

 

Was viewed:

6199 times

 

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Essay content:

Exhbit 1 illustrates that the withdrawal of the 300 Series product line will affect labor, raw materials, power, and repairs. It will have no affect upon the other costs as they are either allocated across the three product lines or historical costs with no relevance. The result based upon period-end numbers for 1973 would project an operating income loss of $1...
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To withdraw the 300 Series would be a poor decision. As the profit and loss statement for June 30, 1974 indicates, the reduction of the unit sales price of Series 100 from $2.45 to $2.25 would mean that the unit sales price would be below the total unit cost of $2.29. Furthermore, the contribution margin percentages show that this product line is clearly the most profitable (see Exhibit 2)...
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