List the alternatives that the company has. Which of the alternatives you listed

Question

List the alternatives that the company has. Which of the alternatives you listed in Riverside Industries has three product lines A, B and C. The following information is available: Riverside Industries is thinking about dropping. Product C because it is reporting a Assume Riverside Industries drops Product C and does not replace it. What will happen to operating income? LeBron Corporation manufactures two products, Simple and Complex. The following information was gathered: Total fixed costs are $180,000. Assume that LeBron Corporation has 50,000 labor available. How many units of Simple and Complex should LeBron Corporation product sell to maximize profits?

Explanation / Answer

Ans 2 If Product C is dropped Loss of Contribution 9000 Saving In avoidable fixed cost -3000 Add: Unavoidable fixed cost 7200 Decrease in Operating income 13200 Note unavoidable cost will be incurred irrespective of Product C produced or not so it will be divided among other two prodcut Ans 3 Simple Complex Selling price per unit 37 26 Variable cost per unit 32 22 Contribution per unit 5 4 No. of hours req. for each unit 5 10 Contribution per hour 1 0.4 As contribution per hour is greater in simple so Simple should be produced 50000/5 hours 10000 units of Simple Dear student the first question image is blurred I am not able to read after zoom also I have answered 2 and 3

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