Question
41 is rough
$7.500 greater than if the company bought the part D) $20,000 greater than if the company bought the part 40) Bear Country Granola is considering selling premium granola. It already sells regular for 40) 56.75/pound and would sell premium granola for $9.50/pound. The cost for organic grains for the premium granola would be $1.15/pound. A cost that would not be considered in this decision would be A) the cost of further processing the regular granola into premium granola. B) the extra revenue generated by selling premium. C) the cost of refining the regular granola. any of the above would be considered 41) Brittany Furniture manufactures two products, pillows and cushions, from a joint process. Pillows 41) are allocated $7,000 of the total joint costs of $25,000. There are 2,500 pillows produced and 2,500 cushions produced each year. Pillows can be sold at the split-off point for $12 per unit, or they carn be processed further into a deluxe pillow for additional processing costs of $8,000 and sold for $16 for each deluxe pillow. If the pillows are processed further and made into deluxe pillows, the effect on operating income would be: A) $30,000 net decrease in operating income. B 52,000 net increase in operating income. C) $30,000 net increase in operating income. D) $2,000 net decrease in operating income. o00
Explanation / Answer
Calculate Effect on Operating Income :-
Particulars Amount($) Selling Price (2500*$16) 40000 Less : Additional Cost of Processing (8000) Profit 32000 Less : Split off Point Sales (2500*$12) (30000)
Increase in Operating Income 2000
