Halfway Industries Produces Two Products The Company's Fixed Costs Totaled $140,000, of Which $30,000 Can

question 61

Essay

Halfway Industries produces two products. Information about the products is as follows:
$\begin{array}{lrr}&\text { Clocks}&\text { Headphone:}\\\text { Units produced and sold } & 8,000&20,000\\\text { Selling price per unit } & \$ 16 &\$14\\\text { Variable costs per unit } & 10&9\end{array}$

The company's fixed costs totaled $140,000, of which $30,000 can be directly traced to Clocks and $90,000 can be directly traced to Headphones.
Required:
The effect on the firm's profits if the Headphone product is dropped would be:

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Definitions:

Current Yield

A bond's annual interest payment divided by its current price, indicating the return an investor would expect if the bond is held for a year.

Premium Bonds

Government or corporate bonds that are sold at a price above their face value due to their high credit quality or favorable interest yield.

Discount Bonds

Bonds sold for less than their face value, offering investors the difference as profit upon maturity.