The following summarized data are shown in the projected income statement of Rachel Inc. for two of its product lines X and Y: Projected Income Statement Name of the product lines X Y Sales 370,000 190,000 Costs: Variable costs (230,000) (140,000) Fixed costs (70,000) (60,000) Total costs (300,000) (200,000) Income (loss) 70,000 (10,000) Management is considering shutting down the production and sale of Product Y. The shutdown would have no effect on the total fixed costs and on the sales of Product X. What would be the amount of expected change in profit that would result from the shutting down of Product Y? Group of answer choices Profit would be decreased by $50,000 Profit would be increased by $50,000 Profit would be decreased by $10,000 Profit would be increased by $10,000

The following summarized data are shown in the projected income statement of Rachel Inc. for two of its product lines X and Y: Projected Income Statement Name of the product lines X Y Sales 370,000 190,000 Costs: Variable costs (230,000) (140,000) Fixed costs (70,000) (60,000) Total costs (300,000) (200,000) Income (loss) 70,000 (10,000) Management is considering shutting down the production and sale of Product Y. The shutdown would have no effect on the total fixed costs and on the sales of Product X. What would be the amount of expected change in profit that would result from the shutting down of Product Y? Group of answer choices Profit would be decreased by $50,000 Profit would be increased by $50,000 Profit would be decreased by $10,000 Profit would be increased by $10,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 11MCQ: Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett...

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Name of the product lines	X	Y
Sales	370,000	190,000
Costs:
Variable costs	(230,000)	(140,000)
Fixed costs	(70,000)	(60,000)
Total costs	(300,000)	(200,000)
Income (loss)	70,000	(10,000)

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