Roadrunner Manufacturing Produces Item Q with Variable Manufacturing Costs of $16/unit.The

question 146

Essay

Roadrunner Manufacturing produces Item Q with variable manufacturing costs of $16/unit.The selling price of Item Q is $20/unit.The fixed manufacturing overhead cost is $75,000.A normal production run includes 150,000 units.Roadrunner Manufacturing has discovered an additional process to change Item Q into Item QR.Additional costs are estimated at $3/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 Q?

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Definitions:

Popliteal Artery

The artery located behind the knee that provides blood supply to the lower leg, knee, and thigh.

Tachypnea

Abnormally rapid breathing.

Rapid Breathing

An increased rate of respiration, which may occur due to exercise, stress, or medical conditions.

Internal Factor

An element within an organization or system that can affect its performance and outcomes.