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:

Problem Drinker

An individual who experiences social, emotional, or physical problems as a result of alcohol consumption.

Drug Therapy

The treatment of diseases and conditions with pharmaceutical drugs, as opposed to surgery or other interventions.

Cognitive Therapy

A form of psychotherapy that focuses on changing unhelpful or unhealthy thought patterns in order to improve emotional regulation and develop personal coping strategies.

Depression

A psychological condition marked by consistent experiences of melancholy, despair, and disinterest or joylessness in activities.