Heinz Manufacturing Produces Item Q with Variable Manufacturing Costs of $12/unit

question 204

Essay

Heinz Manufacturing produces Item Q with variable manufacturing costs of $12/unit. The selling price of Item Q is $15/unit. The fixed manufacturing overhead cost is $72,000. A normal production run includes 100,000 units. Heinz Manufacturing has discovered an additional process to change Item Q into Item QR. Additional costs are estimated at $7/unit. Item QR would sell for $24/unit. Additional fixed manufacturing overhead costs of $4,500 would be incurred if Item QR is produced. There would be no change in the number of units produced.
What would be the operating income for Item QR?

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Definitions:

English-Only Policy

A rule or regulation within an organization requiring the exclusive use of the English language for communication.

Social Norm

Expected standards of conduct within a society or group, which guide behavior of its members.

Personal Information

Data about an individual that identifies them or can be used to identify them, such as name, address, or phone number.

Meeting Success

Achieving the desired outcomes or goals set for a particular gathering or conference.