Lusk Corporation Produces and Sells 16,100 Units of Product X

question 179

Multiple Choice

Lusk Corporation produces and sells 16,100 units of Product X each month. The selling price of Product X is $31 per unit, and variable expenses are $25 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $71,000 of the $111,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the monthly financial advantage (disadvantage) for the company of eliminating this product should be:

• A) ($56,600)
• B) $14,400
• C) $54,400
• D) ($54,400)

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Definitions:

Business Plan

A document that outlines a company's future objectives and strategies for achieving them, often crucial for securing financing.

Business Plan

A detailed document outlining the goals, strategies, market, and financial forecasts of a business, serving as a roadmap for business development and securing funding.

Road Map

A strategic plan or guideline designed to achieve specific long-term goals, often used in project management, product development, and strategic planning.

Planning

The process of making plans for something, including setting goals and deciding how to achieve them.