The Following Data Pertains to the Montrose Company's Three Products

question 78

Multiple Choice

The following data pertains to the Montrose Company's three products: $\begin{array}{lrrr}&M&N&O\\\text { Unit sales per month } & \underline{9,000} & \underline{14,000} & \underline{8,000} \\\\\text { Selling price per unit } & \$ 6.00 & \$ 11.25 & \$ 7.50 \\\text { Variable costs per unit } & 3.00 & 9.00 & 7 . 0 0\\\text { Unit contribution margin } & \$ 3.00 & \$ 2.25 & \$ 0.50 \\\text { Batches } & 5 & 10 & 5 \\\text { Setups } & 6 & 3 & 1\\\text { Difect fixed costs }\\\text { Advertising } & \$ 3,000 & \$ 2,000 & \$ 1,000 \\\text { Supervision } & 5,000 & 5,000 & 5,000\\\end{array}$
Common fixed costs
Inspecting products $(\$ 10,000)$
Materials handling $(\$ 4,000)$
Customer service $(\$ 5,000)$
Plant depreciation $(\$ 6,000)$
General administration $(\$ 8,000)$ When Montrose converted over to ABC it discovered the following: The operating income for Montrose would be

• A)$8,500.
• B)$9,000.
• C)$19,000.
• D)$27,000.

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Definitions:

Acute Phase

A critical and intense period of a condition or situation, often characterized by a sudden onset and severe symptoms.

Disorganization

Lack of structure or order, resulting in decreased efficiency and coherence.

Humiliation

The feeling of being ashamed or embarrassed, often due to being demeaned or made to feel inferior by others.

Self-blame

The act of holding oneself responsible for something that has occurred, often as a psychological response to trauma or failure.