Examlex

Solved

Consider the Following Decision Option Data What Is the Incremental Profit for Option #2?
A)$5,600
B)($2,400)

question 39

Multiple Choice

Consider the following decision option data:  Option #1  Option #2  Number of units 150200 Revenue per unit $25$25 Variable cost per unit $12$12 Lost revenue from choosing option {$500}{$4,000} Cost savings from choosing option $0$1,000 Avo idable fixed cost $0$0\begin{array}{lll}&\text { Option \#1 } & \text { Option \#2 } \\\text { Number of units } & 150 & 200 \\\text { Revenue per unit } & \$ 25 & \$ 25 \\\text { Variable cost per unit } & \$ 12 & \$ 12 \\\text { Lost revenue from choosing option } & \{\$ 500\} & \{\$ 4,000\} \\\text { Cost savings from choosing option } & \$ 0 & \$ 1,000 \\\text { Avo idable fixed cost } & \$ 0 & \$ 0\end{array} What is the incremental profit for Option #2?


Definitions:

Rules-Based

Rules-based refers to systems or processes that are governed by a set of explicit or predetermined rules or principles to ensure consistency and standardization.

External Users

Individuals or entities outside of a company who use its financial information to make decisions, such as investors, creditors, and regulatory agencies.

Financial Accounting Information

The collection of financial data and statements that companies use to report their financial performance to external parties.

Creditor

An individual or institution that lends money or extends credit, expecting repayment in the future.

Related Questions